Adient announces expectations for increased profitability in fiscal 2017

In advance of its anticipated “day one” trading, Adient incoming Chairman and Chief Executive Officer R. Bruce McDonald and other members of Adient’s executive management team will today participate in the company’s first annual investor day in New York. The presentations will highlight Adient’s key investment tenets and the company’s financial expectations for fiscal 2017.    

Adient, the global leader in automotive seating and interiors, expects to begin operating as an independent company and trade on the New York Stock Exchange under the symbol “ADNT” on October 31, 2016, when the spin-off from Johnson Controls (NYSE:JCI) is completed.    

Adient will provide the following FY2017 guidance at today’s analyst day:  

· Revenue of $16.8 to $17 billion

· Adjusted EBIT of $1.15 to $1.2 billion

· Depreciation & amortization of $400 million

· Interest expense of $145 million

· Effective tax rate between 10 and 12 percent

· Adjusted net income between $850 and $900 million

· Capital expenditures between $545 and $575 million

· Free cash flow of $250 million 

In addition to the 2017 financial expectations, today’s presentations will include a discussion of Adient’s leading market positions (by product and geographic region), unmatched presence in China’s automotive seating market, its innovative products and technologies, and mid-term financial outlook.    

“Today’s meeting marks our first opportunity to tell the full investment story of our new company, and we believe it is compelling,” said incoming McDonald. “The automotive business has consistently been a significant growth engine for Johnson Controls over the past 25 years.  Operating as an independent company will enable us to invest in the business to drive profitable growth, ultimately delivering value to our shareholders.”

Investment Thesis

· Leading and strengthening market position

· A customer portfolio that is the envy of the industry

· Well diversified revenue base 

· Industry leading position in China

· Improving profitability; opportunity for further margin enhancement

· Solid and improving cash flow generation 

More information on Adient’s investment thesis is available here: Infographic.

At the analyst day, Adient leaders will detail the company’s leadership position in the China automotive seating market, which is expected to continue as a key growth driver. Adient expects to continue leveraging its position to outpace the overall market growth. 

Adient has 17 seating joint ventures (JVs) in China operating 60 manufacturing locations in 32 cities.  This unique structure combines Adient’s technology, products, management systems and processes, with its Chinese partners’ market access, local knowledge and relationships. It results in high profitability and strong cash flow generation, with 65-70 percent of annual JV equity income paid as cash dividends in prior years. The structure also provides a strong balance sheet profile that is cash rich and allows for maximum disbursement of earnings after reinvestment.

As an independent company, Adient plans to increase investments in innovative products and technology. Participants at today’s meeting will see examples of Adient’s seating development work to meet the emerging trends around autonomous driving, electrification, slim and lightweight seating, and consumer personalization.  

Adient also expects to see opportunities in new adjacent markets outside of the traditional automotive industry, such as in commercial vehicle, passenger train and aircraft seating.

To participate in the meeting via a live webcast at 8.a.m. ET today, visit Johnson Controls’ Investor Relations website at http://investors.johnsoncontrols.com/.

A recording and copy of the presentation will also be available as an archive at the website. 

Adient is the global leader in automotive seating. With 75,000 employees operating in 230 manufacturing/assembly plants in 32 countries worldwide, we produce and deliver automotive seating for all vehicle classes and all major OEMs. From complete seating systems to individual components, our expertise spans every step of the automotive seat-making process. Our integrated, in-house skills allow us to take our products from research and design all the way to engineering and manufacturing – and into more than 50 million cars every year. 

Johnson Controls is a global diversified technology and multi industrial leader serving a wide range of customers in more than 150 countries. Our 117,000 employees create intelligent buildings, efficient energy solutions, integrated infrastructure and next generation transportation systems that work seamlessly together to deliver on the promise of smart cities and communities.   Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat.  We are committed to helping our customers win and creating greater value for all of our stakeholders through strategic focus on our buildings and energy growth platforms. For additional information, please visit http://www.johnsoncontrols.com or follow us @johnsoncontrols on Twitter.

Johnson Controls International plc Inc. has made statements in this document that are forward-looking and, therefore, are subject to risks and uncertainties. All statements in this document other than statements of historical fact are statements that are, or could be, deemed "forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In this document, statements regarding Johnson Controls’ future financial position, sales, costs, earnings, cash flows, other measures of results of operations, capital expenditures or debt levels and plans, objectives, outlook, targets, guidance or goals are forward-looking statements. Words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “forecast,” “project” or “plan” or terms of similar meaning are also generally intended to identify forward-looking statements. Johnson Controls cautions that these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond Johnson Controls’ control, that could cause Johnson Controls’ actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to: uncertainties as to the timing of the spin-off and whether it will be completed, the possibility that various closing conditions for the spin-off may not be satisfied or waived, the expected tax treatment of the spin-off, the impact of the spin-off on the businesses of Johnson Controls and Adient, the risk that disruptions from the spin-off will harm Johnson Controls’ business, competitive responses to the spin-off, general economic and business conditions that affect Johnson Controls and Adient following the spin-off, the strength of the U.S. or other economies, automotive vehicle production levels, mix and schedules, energy and commodity prices, the availability of raw materials and component products, currency exchange rates, and cancellation of or changes to commercial arrangements. A detailed discussion of risks related to Johnson Controls’ business is included in the section entitled “Risk Factors” in each of Johnson Controls, Inc.’s and Tyco International plc’s Annual Reports on Form 10-K for the 2015 fiscal year filed with the SEC on November 18, 2015 and November 13, 2015, respectively, and in the quarterly reports on Form 10-Q filed by each company with the SEC after such date, and available at www.sec.gov and www.johnsoncontrols.com under the “Investors” tab, as well as the Form 10 registration statement filed by Adient Limited and the amendments thereto. Shareholders, potential investors and others should consider these factors in evaluating the forward-looking statements and should not place undue reliance on such statements. The forward-looking statements included in this document are made only as of the date of this document, unless otherwise specified, and, except as required by law, Johnson Controls assumes no obligation, and disclaims any obligation, to update such statements to reflect events or circumstances occurring after the date of this document.