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November 15, 2019 09:51 AM

Weak auto industry bites Adient in 2019

Simon Robinson
Urethanes Technology International
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    Adient-2018-Shanghai-logo-800.jpg
    Adient

    Plymouth-based Adient plc is projecting at least a $60 million hit to its income in 2020 from the virus.

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

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

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

    At the same time, adjusted EBITDA in the region shrank by 30.5 percent. It was $210 million in 2019. This compares with $302 million in 2018. Adient said that most of the hit was taken in the first half of the year. There was a 70 percent 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 percent between 2018 and 2019. They reached $6.7 billion in 2019. This compares with $7.4 billion in 2018. 

    Meanwhile, Adjusted EBITDA in the division shrank by 55.8 percent. It reached $161 million in 2019. This compares with $364 million 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 percent 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 percent between 2018 and 2019. They reached $2.3 billion in 2019. This compares with $2.6 billion in 2018.

    Adjusted EBITDA in the division shrank by 17.79 percent. It reached $513 million in 2019. This compares with $624 million 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 billion and$15.8 billion. adjusted EBITDA should be between $820 million and $860 million.

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