Lear Corporation · NYSE:LEA
Lear — Q1 2010 Earnings Presentation
24 slides from Lear's earnings presentation, May 6, 2010
Slide 1: First Quarter Results and Revised Full Year 2010 Outlook
First Quarter Results And Revised Full Year 2010 Outlook May 6, 2010 1
Slide 2: Agenda
Agenda Company Overview – Bob Rossiter, Chairman, CEO and President First Quarter Results and Full Year 2010 Outlook – Matt Simoncini, SVP and CFO Summary and Outlook – Bob Rossiter, Chairman, CEO and President Q and A Session 2
Slide 3: First Quarter 2010 Company Highlights
First Quarter 2010 Company Highlights* Continued Positive Momentum – Completed transformational refinancing; no significant debt maturities until 2018 – Sales growth and margin improvement in both Seating and Electrical Power Management segments – Positive first quarter financial results provide a s
Slide 4: Completed Transformational Refinancing
First Quarter 2010 Completed Transformational Refinancing* Cash and Debt Balances Benefits of 2010 Refinancing (in millions) As of 4/3/2010 $1,300 No significant debt maturities until 2018 Improves long-term financial flexibility $745 – Low overall total debt levels – Lower annual interest expense –
Slide 5: First Quarter Results and Revised Full Year 2010 Outlook
First Quarter Results and Revised Full Year 2010 Outlook 5
Slide 6: Lear Financial Summary
First Quarter 2010 Lear Financial Summary* Industry production improved year-over-year in mature markets; strong growth in Asia continued Net sales of $2.9 billion, up 36% Core operating earnings of $138 million vs. negative $67 million a year ago Free cash flow of $4 million vs. negative $219 milli
Slide 7: Global Vehicle Production Environment
First Quarter 2010 Global Vehicle Production Environment Units (in millions) First Quarter 2010 Change From Actual Prior Year Europe 4.4 up 32% North America 2.9 up 72% China 3.3 up 65% Brazil 0.7 up 20% India 0.8 up 40% Global 17.2 up 47% Source: Ward’s Automotive and CSM Worldwide 7
Slide 8: Reported Financials
First Quarter 2010 Reported Financials* (in millions) First Quarter 2010 B/(W) 2009 2010 2009 Net Sales Europe $ 1,042.7 $ 1,255.6 20% North America 695.9 987.6 42% Rest of World 429.7 695.3 62% Worldwide $ 2,168.3 $ 2,938.5 36% Pretax Income (Loss) Before Interest and Other Expense $ (187.9) $ 120.
Slide 9: Impact of Restructuring and Other Special Items
First Quarter 2010 Impact of Restructuring and Other Special Items* (in millions) First Quarter Reported Results 2010 Pretax Income Before Interest and Other Expense $ 120.2 Income Statement Category COGS SG&A Costs related to operational restructuring actions 14.2 $ 14.0 $ 0.2 Other special items 3
Slide 10: Electrical Power Management Performance
First Quarter 2010 Electrical Power Management Performance* Adjusted Electrical Power Management Explanation of First Quarter Segment Margins Year-to-Year Change 5.0% Sales Factors + Higher global vehicle production (12.6%) + Sales backlog + Favorable foreign exchange – Selling price reductions Marg
Slide 11: Seating Performance
First Quarter 2010 Seating Performance* Explanation of First Quarter Adjusted Seating Segment Margins Year-to-Year Change 6.8% Sales Factors + Higher global vehicle production + Favorable foreign exchange – Selling price reductions Margin Performance 1.4% + Higher global vehicle production + Favorab
Slide 12: Free Cash Flow
First Quarter 2010 Free Cash Flow* (in millions) First Quarter 2010 Net Income Attributable to Lear $ 66.1 Depreciation / Amortization 58.5 Working Capital / Other (85.7) Cash from Operations $ 38.9 Capital Expenditures (34.8) Free Cash Flow $ 4.1 * Free cash flow represents net cash provided by ope
Slide 13: Status of Lear Share Count
Status of Lear Share Count Number of Shares Common Stock (as of 4/3/10) 44.4 million Preferred Stock (as of 4/3/10) 5.2 million Warrants (as of 4/3/10) 3.7 million Management Restricted Stock Units (vest through Feb. 2013) 1.3 million Total Shares, assuming full conversion/exercise/vesting 54.6 mill
Slide 14: Revised Full Year 2010 Global Industry Environment
Revised Full Year 2010 Global Industry Environment* Units (in millions) Full Year 2010 Forecast Memo: Revised Change From Change From Outlook Prior Outlook Prior Year Europe 15.8 up 3% up 1% North America 11.0 up 5% up 28% China 13.1 up 8% up 18% Brazil 3.1 flat up 5% India 3.1 up 9% up 28% Global 6
Slide 15: Revised Full Year 2010 Financial Outlook
Revised Full Year 2010 Financial Outlook* Revised Full-Year 2010 Financial Outlook Net Sales ≈ $11.0 billion Core Operating Earnings $375 to $425 million Pretax income before interest, other expense, restructuring costs and other special items Depreciation and Amortization ≈ $250 million Interest Ex
Slide 16: Summary and Outlook
CORPORATION Summary and Outlook 16
Slide 17: Summary and Outlook
Summary and Outlook* Completed transformational refinancing; no significant debt maturities until 2018 Lear’s strong customer focus and operating fundamentals remain unchanged April 3, 2010 cash balance of $1.3 billion and total debt of $745 million 2010 financial outlook: – Core Operating Earnings
Slide 18: www.lear.com
R LEA Listed NYSE www.lear.com 18
Slide 19: Non-GAAP Financial Information
Non-GAAP Financial Information In addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”) included throughout this presentation, the Company has provided information regarding “pretax income (loss) before interest and other expense,”
Slide 20: Non-GAAP Financial Information: Core Operating Earnings
Non-GAAP Financial Information Core Operating Earnings Three Months (in millions) Q1 2009 Q1 2010 Pretax income (loss) $ (257.1) $ 80.2 Interest expense 56.4 19.0 Other expense, net 12.8 21.0 Pretax income (loss) before interest and other expense $ (187.9) $ 120.2 Restructuring costs and other speci
Slide 21: Non-GAAP Financial Information: Segment Earnings
Non-GAAP Financial Information Segment Earnings Three Months (in millions) Q1 2009 Q1 2010 Seating $ (75.3) $ 149.6 Electrical power management (67.6) 25.6 Segment earnings (142.9) 175.2 Corporate and geographic headquarters and elimination of intercompany activity (45.0) (55.0) Pretax income (loss)
Slide 22: Non-GAAP Financial Information: Adjusted Segment Earnings
Non-GAAP Financial Information Adjusted Segment Earnings Three Months Q1 2009 Electrical Power (in millions) Seating Management Sales $ 1,752.7 $ 415.6 Segment earnings $ (75.3) $ (67.6) Costs related to restructuring actions 99.1 15.4 Adjusted segment earnings $ 23.8 $ (52.2) Three Months Q1 2010 E
Slide 23: Non-GAAP Financial Information: Cash from Operations and Free Cash Flow
Non-GAAP Financial Information Cash from Operations and Free Cash Flow Three Months (in millions) Q1 2009 Q1 2010 Net cash provided by (used in) operating activities $ (336.8) $ 38.9 Net change in sold accounts receivable 138.5 - Net cash provided by operating activities before net change in sold ac
Slide 24: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding anticipated financial results and liquidity. The words “will,” “may,” “designed to,” “outlook,” “believes,” “sho