SOUTHFIELD, Mich., June 27, 2023 /PRNewswire/ – Lear Corporation (NYSE: LEA), a global automotive technology leader in Seating and E-Systems, increased the Company’s 2023 financial outlook and Seating target margins during its Seating Product Day.
Lear also shared details on its latest technologies and announced new business awards in Thermal Comfort Systems that will support market share gains and earnings growth in Seating.
• Increased 2023 outlook for net sales, core operating earnings and free cash flow
• Increased JIT seating market share target to 29% (from 28%) by 2027 and introduced overall Seating market share target of 32% by 2027
• Increased Seating target margin range to 8.5% to 9.0% (from 7.5% to 8.5%)
• Expect Seating adjusted earnings to increase by ≈$700 million from 2023 to 2027
• 2023 Thermal Comfort Systems awards are more than 40% ahead of last year
• Targeting #1 or #2 market positions for key Thermal Comfort Systems product categories by 2027
• Announced that Lear controls 259 patent assets on FlexAir™ and modularity
• Increased expected Thermal Comfort Systems total addressable market industry outgrowth to 4 percentage points (from 2 percentage points) annually through 2027
• Increased Thermal Comfort Systems revenue target to $1 billion (from $800 million) by 2027
• Awarded first-to-market contract to supply INTU™ products on several future vehicle models with an ultra-luxury European automaker
• Awarded first FlexAir™ production contract on a crossover vehicle launching in 2024 with an Asian automaker
• Announced exclusive automotive license for FlexAir™ technology
• Announced 16 development projects on 41 platforms for FlexAir™ and modularity
A replay of the Seating Product Day webcast can be accessed through the Investor Relations section of Lear’s website at ir.lear.com.
In addition to amounts reported in accordance with accounting principles generally accepted in the United States (GAAP) included throughout this press release, the Company has provided information regarding “pretax income before equity income, interest, other expense, restructuring costs and other special items” (core operating earnings or adjusted Seating earnings) and “free cash flow” (each, a non-GAAP financial measure). Other expense includes, among other things, non-income related taxes, foreign exchange gains and losses, gains and losses related to certain derivative instruments and hedging activities, gains and losses on the disposal of fixed assets and the non-service cost components of net periodic benefit cost. Free cash flow represents net cash provided by operating activities less capital expenditures.
Management believes the non-GAAP financial measures used in this press release are useful to both management and investors in their analysis of the Company’s financial position and results of operations. In particular, management believes that core operating earnings is a useful measure in assessing the Company’s financial performance by excluding certain items that are not indicative of the Company's core operating performance or that may obscure trends useful in evaluating the Company’s continuing operating activities. Management also believes that this measure provides improved comparability between fiscal periods. Management believes that free cash flow is useful to both management and investors in their analysis of the Company’s ability to service and repay its debt. Further, management uses these non-GAAP financial measures for planning and forecasting future periods.
Core operating earnings and free cash flow should not be considered in isolation or as a substitute for net income attributable to Lear, cash provided by operating activities or other income statement or cash flow statement data prepared in accordance with GAAP or as a measure of profitability or liquidity. In addition, the calculation of free cash flow does not reflect cash used to service debt and, therefore, does not reflect funds available for investment or other discretionary uses. Also, these non-GAAP financial measures, as determined and presented by the Company, may not be comparable to related or similarly titled measures reported by other companies.
About Lear Corporation
Lear, a global automotive technology leader in Seating and E-Systems, enables superior in-vehicle experiences for consumers around the world. Lear’s diverse team of talented employees in 37 countries is driven by a commitment to innovation, operational excellence, and sustainability. Lear is Making every drive better™ by providing the technology for safer, smarter, and more comfortable journeys. Lear, headquartered in Southfield, Michigan, serves every major automaker in the world and ranks 189 on the Fortune 500. Further information about Lear is available at lear.com or on Twitter @LearCorporation.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding anticipated financial results and liquidity. The words “will,” “may,” “designed to,” “outlook,” “believes,” “should,” “anticipates,” “plans,” “expects,” “intends,” “estimates,” “forecasts” and similar expressions identify certain of these forward-looking statements. The Company also may provide forward-looking statements in oral statements or other written materials released to the public. All statements contained or incorporated in this press release or in any other public statements that address operating performance, events or developments that the Company expects or anticipates may occur in the future are forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements are discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, and its other Securities and Exchange Commission filings. Future operating results will be based on various factors, including actual industry production volumes, supply chain disruptions, commodity prices, changes in foreign exchange rates, the impact of restructuring actions and the Company's success in implementing its operating strategy.
Information in this press release relies on assumptions in the Company's sales backlog. The Company's sales backlog reflects anticipated net sales from formally awarded new programs less lost and discontinued programs. The Company enters into contracts with its customers to provide production parts generally at the beginning of a vehicle’s life cycle. Typically, these contracts do not provide for a specified quantity of production, and many of these contracts may be terminated by the Company’s customers at any time. Therefore, these contracts do not represent firm orders. Further, the calculation of the sales backlog does not reflect customer price reductions on existing or newly awarded programs. The sales backlog may be impacted by various assumptions embedded in the calculation, including vehicle production levels on new programs, foreign exchange rates and the timing of major program launches. The forward-looking statements in this press release are made as of the date hereof, and the Company does not assume any obligation to update, amend or clarify them to reflect events, new information or circumstances occurring after the date hereof.