Adient plc Ordinary Shares J.P. Morgan Automotive Conference

Great. Thanks, Mark. Thanks, Rajat.

Thank you very much for hosting us today. Really appreciate being out here today. Thank you for joining us this morning. As you know, Adient released its Q3 fiscal year 2026 earnings last week, so I'm not going to go into a lot of detail just in terms of financials. A lot of people have looked at those. We've had the post-earnings calls. I did think it was worthwhile to go through at least a summary of how we see 2026 shaping up. We've got one quarter left here, and then more importantly, what we're seeing as we head into 2027. Then I'll turn it over to Jim Conklin.

Jim heads up our Americas operations within the Americas, so I know there's going to be a lot of questions just in terms of what the Americas team is doing in terms of onshoring, how they're implementing automation across the enterprise, what they're doing in terms of margin expansion. I'll leave some time for Jim, then obviously take some questions, Rajat. Just starting off with 2026, I'd say the key takeaway there is we're delivering on our commitments. We laid out some commitments at the beginning of the year. Team has done a good job at executing against that. The Adient operating model is working extremely well. There has been some external macro challenges, obviously, with Middle East, higher input costs. What we've shown is each of the regions have been very resilient. We've been able to battle through certain of those.

We do view those as temporary. When I look at what is more sustaining, though, is really the growth over market that we are seeing within the Americas division, what we are seeing over in China. We would expect that to continue as we look into 2027. Again, if I look at what we are doing from a capital allocation perspective, we said that we are going to be balanced with the capital allocation. We have been buying shares back. We expect to buy more shares back here in the fourth quarter. It is all about generating cash flow. How can we return that to the shareholders, whether it is through buybacks, whether it is through some voluntary debt paydown, so you could expect more of that. When I look at that as we exit 2026 into 2027, I think we are entering 2027 from a position of strength.

We expect that the program wins that Jim and team have done through the onshoring in the U.S., obviously will help the top line there. Growth over market in China is going to be continued strong in 2027. That is going to allow us to continue to increase our business performance. Business performance improving on the backs of whether it is automation, whether it is the restructuring that we have spent over in Europe starting to take hold, the continuous improvement. That in turn will continue to drive margins higher as we go into 2027 from 2026. Again, as we look into 2027, there is a lot of positive notes that we are seeing on that front. We did indicate that there is a few things that need fine-tuning as we go through the next couple of months here.

We still have to look to see where inventories end up in 2026, what that is going to impact in terms of overall vehicle production in 2027. Restructuring, kind of hard to call at this point. We are looking, especially over in Europe, we spent quite a bit of dollars restructuring the past couple of years. That is going to be dependent in terms of what happens with our customers, in terms of what they are going to do with their product programs, what they are going to do with their plants. Does it have a ripple effect into us? Some of those bills could be $20 million-$30 million. That is why when we are sitting here today, I cannot give you a specific number in terms of restructuring. Other to say that we will continue to operate in a fiscally responsible way and spend the money if we need to, with you in mind.

We will look at other items such as CapEx as we continue to spend on automation. Again, being fiscally responsible, but understanding that we need to continue to invest in the automation to continue to drive the business performance and margins higher. Really positive about where we are finishing 2026. Very positive in terms of heading into 2027 that the Adient business operating model will continue to drive the results positive. From this view right now, very positive in terms of next year. With that, I will turn it over to Jim where he could touch base on the Americas.

Yeah. Thanks, Mark. The Americas for us is about a $7 billion region made up of North and South America. We have a little over 40 plants within the network. Just a little bit of color specifically on Americas specifically. As Mark mentioned, we continue to execute extremely well. It's our day-to-day execution with our customers that's really the key foundation for us to be able to have the growth that we're anticipating. Call it over $400 million of new incremental conquest and onshoring business over the next couple of years. That really allows us to be one of the key drivers of growth within the network. That includes going over recent launches. Recently launched the Kia Telluride seats, as well as Rivian R2 seats. We'll continue to see more and more of that as we go forward and executing very well.

From the customer and supplier partnerships, we continue to stay very close with our customers, not only on the launch activities, but how we're growing, where we're growing, and how to bring the right level of innovation and creative solutions for our customers as they execute onshoring, new program launches, and things like that. For example, we've had multiple customer meetings just even. In the month of July, we had one customer with members of their board of directors come to one of our manufacturing plants, and their top executive team to walk them through how we're executing today on their products and our vision with very tangible evidence on our shop floor of how we're executing the next generation with a new level of innovation, automation, implementation of AI in order to be more cost-effective, driving the right quality solutions for our customers going forward.

A lot of that customer interaction includes dealing with some of the ups and downs we've seen over the, call it 2026 in the truck market. Making sure that we're staying ready, available, and adaptable, and flexible. However, they choose to be able to run trucks from a high content version to a low content version, and some of the erratic nature that we're getting past on some of the truck production that we have. On the innovation and automation side, this is where we're spending one of the biggest parts of our energy and efforts right now. What's clear to us is that if you're not thinking of the next way to make seats or any type of interior product, if you're sticking with a traditional manufacturing mentality in this market, you're going to be left behind. We have to be very aggressive.

We have to be very creative on how we're driving cost out of our network. Whether it's the cost of labor going forward, availability of labor going forward, or simply a way to drive the overall vehicle price down. This has to be and is a way that we continue to challenge ourselves on the next way to manufacture design and manufacture seats going forward. We've started at this. We've been very aggressive with this. We started by targeting what I'd call the non-value activities as a part of seat manufacturing. Non-value activities would mean the end customer doesn't really care about it. End customer doesn't care if you have to test the seat to make sure it functions correctly or it looks pretty at the end of your seat assembly line. We started on really focusing on automation on that.

Since then, we've expanded that to look at how do we do more of the value-added content. How do we install components and parts as a part of the manufacturing process to be more cost-effective. So we've launched multiple pilots that are actually currently going on in our plants right now that all have, frankly, less than a two-year payback period. While a lot of the generation and creativity of these innovations start in a laboratory environment, start at our corporate offices, we work very quickly to get it onto the shop floor.

What we've seen is that once we get this technology and these new ideas and these new innovations into a plant's hands, they're going to drive a whole new level of execution and creativity to it to make sure that we have the right uptime, that we're delivering the right quality, and most importantly, we're getting the payback that we've committed their valuable capital dollars to as a part of a payback period to make sure that we're seeing the cost-effective on this, and not just increasing our fixed costs as a part of that going forward. That continues to be a very high priority for us. Our customers are extremely interested in it, and this is one of the keys that's a contributing factor to how we're growing within this market in the region of Americas.