Plymouth, Michigan – Adient had a tough first quarter of 2022, with EBITDA dropping by 165% in the EMEA region, 93% in the Americas and 24% in Asia, on global sales that were down in all regions except Asia.
Tough Q1 2022 for Adient
The automotive interiors company generated $3.5bn in the first quarter of 2022, down 9.6% on the same period last year.
'As expected entering FY22, many of the macro factors that influence the industry last year continue to affect our results in early 2022,' said CEO Doug Del Grosso.
The company suffered from supply chain disruptions, which made production less efficient. High commodity prices, freight costs, a shortage of labour and inflation all hit the business in the quarter.
As the quarter progressed, steel prices softened, and the dramatic swings in production schedules lessened, the company added.
In the Americas, sales declined by 13.8% year on year to $1.5bn in the first quarter of 2022. This compares with $1.7 in the equivalent period in 2021.
Adjusted EBITDA was $9m, compared with $132m in the equivalent period in 2021.
Better new product launch procedures, lower operating costs and lower sales, general and administration costs could not offset the costs of supply chain disruptions, plant shutdowns and lower volumes.
The company's EMEA business sales fell 23.3% to $1.2 bn in the first quarter of 2022. In the first quarter last year, sales were $1.6bn.
Adjusted EBITDA in the most recent quarter was $43m compared, with $114m in the equivalent period in 2021.
Lower equity income, higher freight costs and lower volumes affected the business in the EMEA region.
Sales in Asia, the smallest region, bucked the trend, and were up by 41.5% at $784m in the quarter. This compares with $554m in the same quarter last year.
Adjusted EBITDA in the region fell by 24.5% to $114m in the quarter.
Volumes were higher and the company made more profitable production in the Asia region during the quarter. But the business was hit by higher freight and new product launch costs and a flood in Malaysia.
The company's balance sheet is stronger and the company has managed to reduce net debt by about $100m to $1.5bn. Cash holdings have increased from $1.5bn in the first quarter of 2021 to $2bn in the 2022 quarter.