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Adient PLC ADNT

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PREMIUM

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Adient's Fiscal Second Quarter Shows Continued Improvement and Debt Reduction

Analyst Note

| David Whiston, CFA, CPA, CFE |

Adient’s fiscal 2021 second-quarter results saw strong performance in Europe and Asia which enabled diluted EPS of $1.15 (up 85% year over year) to easily beat the Refinitiv consensus of $0.56. Despite semiconductor shortages ravaging customer production, particularly in the upcoming fiscal third quarter, management confirmed previously issued revenue and adjusted EBITDA guidance for the full year and raised free cash flow guidance to a range of about $50 million to $150 million, from $0-$100 million, on better than expected joint venture dividends from China. We are raising our fair value estimate to $65 from $63 on better gross margins in fiscal 2023 and improved fiscal 2021 free cash flow.

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Company Profile

Business Description

Adient began trading Oct. 31, 2016, when Johnson Controls spun off its automotive experience segment into this new company. Adient is the leading seating supplier to the industry with about one third of the global market as well as a dominant share in China of about 45% which should decline after Adient sells its main Chinese joint venture in calendar 2021. Operations in China are for now accounted for under the equity method so most revenue there is unconsolidated. Unconsolidated seating revenue from joint ventures totaled $9.5 billion in fiscal 2020. The company is headquartered in Ireland but has corporate offices in the Detroit area. Fiscal 2020 consolidated revenue, excluding joint venture sales, was $12.7 billion.

Contact
25-28 North Wall Quay, IFSC, Dublin 1
Dublin, D01 H104, Ireland
T +1 734 254-5000
Sector Consumer Cyclical
Industry Auto Parts
Most Recent Earnings Mar 31, 2021
Fiscal Year End Sep 30, 2021
Stock Type
Employees 77,000

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