Lear Corporation · NYSE:LEA
Lear — Q1 2003 Earnings Presentation
20 slides from Lear's earnings presentation, Apr 16, 2003
Slide 1: First Quarter 2003 Earnings Review and Updated Guidance
April 16, 2003 a d v a n c e r e l e n t l e s s l y First Quarter 2003 Earnings Review and Updated Guidance 1
Slide 2: Agenda
Agenda I.I. Strategic Strategic Focus Focus Bob Bob Rossiter, Rossiter, Chairman Chairman & & CEO CEO II. II. Industry Industry Update Update Jim Jim Vandenberghe, Vandenberghe, Vice Vice Chairman Chairman III. III. First First Quarter Quarter Results Results and and 2003 2003 Outlook Outlook Dave D
Slide 3: Strategic Focus
Strategic Focus Best Equity Value in Industry #1 or #2 in Market Share in Core Products / Markets Highest Rated Tier I Supplier in Quality and Customer Satisfaction Customer-Focused and Performance-Driven Culture 3
Slide 4: First Quarter 2003 Highlights
First Quarter 2003 Highlights Customer-Focused Strategy Driving Success •• Record Recordquarterly quarterlynet netsales salesof of$3.9 $3.9billion billion •• Earnings Earningsper pershare shareof of$1.01, $1.01,up up44% 44%from fromprior prioryear’s year’s comparable comparablebasis basis •• Strong
Slide 5: Lear Named America's Most Admired Automotive Parts Supplier
Lear Named America’s Most Admired Automotive Parts Supplier Previous Overall Attributes of Reputation * Rank Rank Company Score 11 33 Lear LearCorporation Corporation 7.34 7.34 Quality Qualityof ofProduct/Services Product/Services #1 #1 22 11 Johnson JohnsonControls Controls 7.21 7.21 Quality Qualit
Slide 6: Industry Update: Major Customer Initiatives
Industry Update Major Customer Initiatives Interior Interior Integration Integration--LearLearisisleading leadingGM’s GM’sTotal TotalInterior Interior Integration Integrationinitiative initiativewith withthe thefirst-ever first-everTITIaward awardand andworking working cooperatively cooperativelytot
Slide 7: Update on Major Lear Initiatives
Update on Major Lear Initiatives Six Six Sigma Sigma--Deployed Deployedglobally globallywith with700 700blackbelts blackbeltsand andover over4,000 4,000 greenbelts greenbeltsin inplace; place;8,000 8,000projects projectsnow nowcomplete complete Lean Lean Manufacturing Manufacturing--Lean LeanManufac
Slide 8: Sales Backlog Supports 5% Annual Revenue Growth
Sales Backlog Supports 5% Annual Revenue Growth Net Sales (in millions) $18,425 500 R CAG 5% 900 1,000 700 900 $14,425 2002 2003 2004 2005 2006 2007 • Lear positioned for 5% annual sales growth • Based on current backlog and a constant 16M vehicle production environment in both North America and Wes
Slide 9: Broader Definition of Automotive Interior Market
Broader Definition of Automotive Interior Market Cockpits Electronics 9
Slide 10: Total Size of Broader Market (Global)
Total Size of Broader Market (Global) Global Market (in billions) Lear will strategically target $191 value-added opportunities $70 $61 $60 $70 $60 Electrical Distribution $19 Interiors $15 $61 $61 $61 Seats $27 Current Add Add Add Global Cockpits Electronics Cockpits Market and Electronics A Broade
Slide 11: Financial Review: Production Environment - First Quarter 2003
Financial Review Production Environment - First Quarter 2003 North NorthAmerica America •• Industry Industryproduction productionup up3%; 3%;Big BigThree Threeup up1% 1% •• CPV CPVof of$594 $594up up3% 3%from fromaayear yearago, ago,reflecting reflectingnew newbusiness business Western WesternEurope
Slide 12: Financial Highlights - First Quarter 2003
Financial Review Financial Highlights - First Quarter 2003 First First 1Q ‘03 (in millions, except earnings per share) Quarter 2003 Quarter 2002 B/(W) 1Q ‘02 Net NetSales Sales $$ 3,898.7 3,898.7 ü $$ 3,534.6 3,534.6 $$ 364.1 364.1 Operating OperatingIncome Income $$ 161.9 161.9 $$ 141.0 141.0 $$ 20
Slide 13: 1Q03 versus 1Q02 - Change in Operating Income
Financial Review 1Q03 versus 1Q02 - Change in Operating Income Industry Industry Industry Vehicle Vehicle Vehicle Production Production Production N.A. N.A. N.A. 3%6% 3% W.E. W.E. W.E. (2)%(1)% (2)% S.A. S.A. S.A. 11%(22)% 11% (in millions) $21 $11 $5 $5 Total Change Net Production, Currency & Globa
Slide 14: 1Q03 Free Cash Flow
Financial Review 1Q03 Free Cash Flow First Quarter 2003 (in millions) Net NetIncome Income $$ 68 68 Depreciation Depreciation 74 74 Working WorkingCapital Capital//Other Other 88 Cash Cashfrom fromOperations Operations** $$ 150 150 Capital CapitalExpenditures Expenditures ((70 70)) Free FreeCash Cas
Slide 15: Business Conditions
Financial Review Business Conditions North NorthAmerica America •• U.S. U.S.retail retailsales salesin inFebruary Februarywere werebelow below1616million millionannual annualrate; rate;March Marchsales sales slightly slightlyabove above16 16million millionannual annualrate rate •• Second Secondquart
Slide 16: 2003 Vehicle Production Outlook
Financial Review 2003 Vehicle Production Outlook North America Western Europe (in millions) (in millions) 16.4 16.2 15.9 15.9 15.7 15.7 FY 2002 Actual FY 2003 Outlook FY 2002 Actual FY 2003 Outlook Q2 4.6 Down 10% Q2 4.4 Down 5% 2003 Production Down in North America and Western Europe 16
Slide 17: 2003 Guidance
Financial Review 2003 Guidance Second Quarter Earnings Per Share Full Year Earnings Per Share Net Sales of Net Sales of $3.8 - $3.9 Billion Au $15 Billion $1.27 $5.25 $1.30 $4.65 $1.20 $4.85 2002 2003 2002 2003 Interest Expense $ 50 M $ 200 M Capital Expenditures $ 100 M $ 300 M Free Cash Flow $ 75
Slide 18: The Lear Philosophy
The Lear Philosophy Put Our Customers First in Everything We Do •• Stay Stayfocused focusedon onwhat whatwe wecan cancontrol control----quality, quality, customer customerservice, service,cost costand anddelivery delivery •• Operate Operatewith withaaLBO LBOmentality mentality •• Work Worktogether t
Slide 19: Advance Relentlessly
ADVANCE RELENTLESSLY™ NYSE: LEA www.lear.com
Slide 20: Forward Looking Statement
Forward Looking Statement This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding anticipated financial results. Actual results may differ materially from anticipated results as a result of certain r