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November 15, 2019 09:05 AM

Weak auto industry bites Adient in 2019

Simon Robinson
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    Plymouth, Michigan — Adient, which makes automotive seating and interiors, found that its adjusted EBITDA fell 34% to $787 m in 2019. Sales of $16.5 bn in the year were lower by 5% than in 2018.

    Doug Del Grosso, CEO said: 'While the team made solid progress in advancing the turnaround plan in 2019, we recognise the significant opportunity that lies ahead.'

    The company's business in the Americas was the stand out in 2019. Here sales grew by 1.6%% and reached $7.8 bn in 2019. This compares with $7.7 bn in 2018.

    Del Grosso: Opportunities ahead

    At the same time, adjusted EBITDA in the region shrank by 30.5%. It was $210 m in 2019. This compares with $302 m in 2018. Adient said that most of the hit was taken in the first half of the year. There was a 70% improvement  adjusted EBITDA in the second half compared with the first half of 2019. This was due to the company's turnaround plan.

    The company's EMEA business saw sales shrank by 10.23% between 2018 and 2019. They reached $6.7 bn in 2019. This compares with $7.4bn in 2018. 

    Meanwhile, Adjusted EBITDA in the division shrank by 55.8%. It reached $161 m in 2019. This compares with $364 m in 2018. 

    A combination of inefficiencies caused by new launches, was in large part to blame for the fall in EBITDA. There was a marked 60% improvement in this measure in the second half of the year, compared with the first half. The company managed to reduce freight costs in the second half and lower materials prices helped EBITDA. 

    Sales at the company's Asia business shrank by 12.11% between 2018 and 2019. They reached $2.3 bn in 2019. This compares with $2.6bn in 2018.

    Adjusted EBITDA in the division shrank by 17.79%. It reached $513 m in 2019. This compares with $624 m in 2018. The company said that it managed its head counts and flexible costs to help to support margins despite weak industry performance.

    Adient said that it expects to improve earnings and cash flow in 2020 despite continued economic and market pressures. It expects consolidated sales to be between $15.6 bn and$15.8 bn. adjusted EBITDA should be between $820 m and $860 m.

    Adient 2019 ( $ m)
    2019 2018 Change %
    Sales 16526 17439 -5.2%
    Adjusted EBITDA 787 1196 -34.2%
    Margin % 5% 7%
    Americas
    Sales 7785 7664 1.6%
    Adjusted EBITDA 210 302 -30.5%
    Margin % 3% 4%
    EMEA
    Sales 6675 7436 -10.23
    Adjusted EBITDA 161.0 364.0 -55.8
    Margin % 2.4% 4.9%
    Asia
    Sales 2337 2659 -12.1
    Adjusted EBITDA 513.0 624.0 -17.8
    Margin % 22% 23%
    Sorurce: Adient
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