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Adient PLC ADNT

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Morningstar’s Analysis

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Chip Shortage Drags Adient's Profits Down to End Fiscal 2021

Analyst Note

| David Whiston, CFA, CPA, CFE |

Adient finished fiscal 2021 with a quarter marred by supply chain issues beyond its control. We are leaving our fair value estimate unchanged, but as always, we’ll reassess all modeling inputs once the 10-K is filed. We continue to see more upside potential in the stock than risk of permanent investment loss, but high steel prices and the chip shortage will continue to be problems in fiscal 2022. For full-year fiscal 2021, the semiconductor shortage cost Adient about $1.9 billion in lost sales and around $450 million in adjusted EBITDA.

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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. Its share in China is now nearly 20%, down from about 45%, following the sale of its main joint venture there at the end of fiscal 2021. Unconsolidated seating revenue from joint ventures after factoring in the sale was around $4.5 billion in fiscal 2021 and guidance for consolidated China revenue after the deal is, for now, slightly over $1 billion. The company is headquartered in Ireland but has corporate offices in the Detroit area. Fiscal 2021 consolidated revenue, excluding joint venture sales, was $13.7 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 Sep 30, 2021
Fiscal Year End Sep 30, 2021
Stock Type
Employees 75,000

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