Supplier Conference 2013 (Combined)

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  • Lear Supplier Conference

  • Welcome

    CEO Video

    Lear CorporationStrengths

    Business Overview and Growth

    Product LeadershipTechnology

    Operational Excellence

    Supplier Expectations

    Supplier Diversity

    Supplier of the Year



  • 3

  • This is Lear

  • 5

    Our Vision & Core Values

  • 6

    The Lear Difference

    Superior Sales Growth . . . Through Innovation

    Customer and Geographic Diversity

    Continuous Improvement Focus

    Financial Discipline

  • 7

    Lear Profile

    Leading Tier 1 global automotive supplier

    2012 sales of $14.6 billion rank #189 in the Fortune 500

    Three-year sales backlog of $1.8 billion

    Strong global market positions and low-cost footprint in:


    Electrical Distribution Systems

    Diversified sales and customer base serving all of the worlds

    major automakers

    Strong balance sheet with $1.4 billion in cash and no debt

    maturities until 2018

    Leader in product quality, customer service and innovation

    Three-year sales backlog as of January 11, 2012.

  • 8

    Global Capabilities with Low-Cost Footprint

    Low-Cost Engineering Centers

    India, Philippines

    Low-Cost Operations

    22 Countries

    More Than 80% of Component Facilities and More Than 90% of

    Related Employment Located in Low-Cost Countries

  • Strong Market Position -- One of two

    independent seat suppliers with global scale

    and complete component capabilities;

    2012 sales of $11.0 billion

    Key Capabilities -- Complete automotive seat

    systems, seat covers (including cut & sew,

    fabric and leather), mechanisms & structures

    and foam

    Quality Leader -- Lear is the highest quality

    independent major seat manufacturer for 11

    of the last 12 years according to the J.D.

    Power and Associates Seat Quality and

    Satisfaction StudySM

    Benchmark Technology -- Lears EvolutionTM

    Seat has seven first-to-market innovations

    Global Leader in Automotive Seating

    ECO Foam

    ECO Padding

    EVO Mini Recliner

    ECO/EVO Structures

    Expanded Polypropylene Frame

    ProTec PLuS Whiplash Protection

    Dynamic Environmental Comfort Seating (DECS)



    * Provides up to a 30% weight reduction, environmental benefits and cost savings






    Strong Market Position -- One of four suppliers with

    global capability in both traditional and high-power

    electrical power management systems;

    2012 sales of $3.6 billion

    Key Capabilities -- Traditional electrical distribution

    systems, emerging high-power systems and related

    components including connectors, smart junction

    boxes and battery chargers

    Quality Leader -- Outstanding program management

    capabilities support thousands of design changes

    per year with world class quality

    Benchmark Technology -- Lears Solid State Smart

    Junction Box won an industry-leading PACE

    award sponsored by Automotive News

    Sales growth opportunity with improving margins

    Additional consumer demand for features and


    Greater electrification and signal management

    of alternative powertrain design


    Strong Global Position in Automotive

    Electrical Power Management Systems


  • 11

    We Serve all of the Worlds Major Automakers

    Lear Content On Over 300 Vehicle Nameplates Worldwide

  • 12

    Strategic Direction Remains Consistent

    Profitably grow and diversify sales globally

    Continue to expand component capability in emerging and

    low-cost markets

    Pursue niche acquisitions to strengthen both core

    businesses; no transformational acquisitions needed or


    Maintain strong balance sheet with investment grade

    credit metrics

    Consistently return excess cash to shareholders

  • 13

    Investment in Component Capacity in Emerging Markets

    and Low-Cost Countries

    Mexico Mechanisms & Structures

    Seat Trim

    Wire Harnesses

    Brazil Mechanisms & Structures

    Seat Foam

    Seat Trim

    Wire Harnesses

    India Mechanisms & Structures

    Seat Foam

    Wire Harnesses

    Thailand Seat Foam

    Seat Trim

    Wire Harnesses

    China Mechanisms & Structures

    Seat Foam

    Seat Trim



    Wire Harnesses

    Morocco Electronics

    Wire Harnesses Moldova Seat Trim

    Tunisia Wire Harnesses

    Approximately $300 Million Invested to Increase Emerging

    Market and Low-Cost Component Capacity in 2010-2012

    Seating Facilities

    Electrical Facilities


  • Produces automotive fabric for seats, headliners and other

    interior applications

    Strengthens Lears global seat cover capabilities

    Extends Lears regional fabric manufacturing capability presently

    located in China

    Adds design and technical capability to facilitate future growth

    Strong management team with textile and manufacturing


    Further diversifies Lears customer base

    Majority of restructuring is complete

    Includes small, non-automotive specialty fabric business


    Guilford Mills Strategic Benefits

  • One of the strongest balance sheets in the industry

    Strong credit metrics in-line with investment grade peers

    Covenants and capital structure provide flexibility to invest in our business and execute our strategic objectives going forward

    Modest pension and OPEB liability Substantially all U.S. plans are frozen or at

    closed locations with no future benefit accruals

    Balanced and flexible shareholder distribution policy Modest annual dividend Flexible share repurchase program

    Strong Capital Structure and Liquidity

    Cash and Debt Balances


    As of December 31, 2012 (in millions)





    Cash Total Debt Pension/OPEB

    (1) Cash includes cash and cash equivalents

  • 16

    Longer-Term Outlook

    Global growth in automotive demand and further consolidation of supply base

    Increasing customer trend toward global platforms

    Critical success factors: global capabilities, a low-cost footprint and superior quality

    Leading technologies and innovation are key differentiating factors

    Lear well positioned to be successful as the industry recovery continues

    Seating Global capability and scale

    Increasing sales diversification

    Low-cost engineering and manufacturing footprint

    Selective vertical integration in key components

    Among leaders in technology and innovation

    Recognized industry leader in quality

    Electrical Power Management Systems

    Significant growth opportunity

    Global presence and capability

    Competitive low-cost footprint

    Investing in key technologies (e.g., high-power and hybrid electrical

    systems and components, Solid State Smart Junction BoxesTM and

    terminals & connectors)

  • 17

  • Market Overview

  • Market Trends

    Market Growth Forecast

    Lear Growth & Market Position

    New Business Backlog & Key Wins



  • Global vehicle platform proliferation

    Increased direct sourcing of components

    Significant customer expectations regarding pricing,

    productivity and cost reduction

    OEMs increasingly shifting costs (warranty, tooling,

    engineering, etc.) to suppliers

    Increased fuel economy and emi