2. Agenda
“This is Lear” Video
Strategic and Financial Review
Dave Wajsgras, SVP & CFO
Americas Operating Review
Doug DelGrosso, President & COO – Americas
International Operating Review
Don Stebbins, President & COO – International
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4. Strategic Evolution
Going Forward Profitably Grow the Business
Operational Excellence;
1999-2003
Reduce Debt
Seat Systems to
1994-1999
Total Interior Capability
Seat Components
1990-1994
to Seat Systems
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5. Lear’s Strategy has Supported Rapid Growth
Net Sales
(in billions)
$17.0
$18.0
me
Inco
Net
$16.0
2%
GR 2
CA SALES
$14.0
CAGR
$12.0
18%
$10.0
$8.0
$6.0
$3.1
$4.0
$2.0
$0.0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Steadily increased net sales over the last ten years to $17 billion in 2004
Transformed from a seat assembly operation to one of the world’s largest
automotive interior systems suppliers
Ranked #127 in the Fortune 500
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6. At the Same Time,
We have Diversified Our Product Mix
2004
1994
Seats and Seating Seating
Components 67%
100%
Interior
Electronic / Electrical
17%
16%
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7. And Our Geographic Mix
1994 2004
Europe
Europe
17%
39%
Rest of World
North America North America
6%
83% 55%
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8. And Diversified Our Customer Mix
1994 2004
Extended Ford & GM-
Saab, Volvo,
Classic Ford & GM* Jaguar and Land Rover
46% 10%
Classic Ford & GM*
75% DaimlerChrysler
BMW
PSA
All Other Fiat
VW
25% All Other Mazda
Other Asian
Renault-Nissan
* Includes Opel
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9. Financial Highlights
Last Few Years
Solid revenue growth was driven by strong sales backlog
Increased net income per share
Global cost efficiency actions implemented
Debt was reduced, overall financial position strong
2005*
Three key factors impacting near-term results -- adverse
platform mix, lower industry volume and high raw material
and energy prices
Financial outlook improving the balance of this year and
into 2006
* Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information.
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10. Platform Mix has Adverse Impact in 2005
First Quarter Production: 2005 Compared With 2004
Europe Production
North America Production
2%
(3%)
(4%)
(9%)
(11%) (11%)
Big
Overall
Overall Lear’s Top 15
Big Lear’s Top 15
Three
Industry
Industry Platforms
Three Platforms
Trucks
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11. Mitigation Actions
to Help Offset Commodity Movements
Key Commodities Action Plan
• Factor into customer productivity negotiations
Steel • Lear’s Cost Technology Optimization process
• Supply base compression
Resins • Re-sourcing – develop new sources of supply
• In-sourcing – fill open capacity where
Chemicals appropriate
• Low-cost country sourcing and engineering
Energy • Supplier Lean Manufacturing and Six Sigma
Continuing To Work With Customers And Supply Base
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12. Long-Term Outlook
Remains Positive for Lear*
Near-term financial results severely depressed reflecting
transitional volume and cost factors; expected to improve in
second half of 2005 and going forward
Strong three-year sales backlog of $3.8 billion is up 25%
from last year’s three-year backlog
Platform mix to improve in 2006 with full-year benefit of
major 2005 launches and introduction of GMT900
Strong and flexible overall financial position
* Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information.
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14. Americas
U.S. and Canada
28,000 Employees
85 Locations
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15. Americas
Mexico and Honduras
34,000 Employees
36 Locations
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16. Lear’s Importance in Mexico
Maquiladora Company
#1 Petroleos Mexicanos
Delphi
#2 Wal Mart de Mexico
Lear
#3 FEMSA
General Electric #4 Comision Federal de Electricidad
#5 Grupo Carso
Yazaki North America
Alcoa Fujikura Ltd.
#16 Lear
Lear Ranks # 16 Among
Lear Ranks # 2 Among
All Companies In Mexico
Maquiladoras In Mexico
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18. Americas
South America
2,000 Employees
3 Countries / 9 Locations
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19. North America
Challenges Strengths
Industry production Customer focus
volume
Solid fundamentals
Platform mix
Dedicated team
High raw material costs
Leadership position in
Ever increasing customer total interiors
requirements
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20. Major North American Launches
Buick Lucerne
Cadillac DTS
Total Interior Integrator,
Total Interior Integrator,
Electrical Distribution
Electrical Distribution
SOP: 4Q 2005
SOP: 3Q 2005
Chevy Impala / Chevy Monte Carlo
Hyundai Sonata
Seats
Seats, Wire Harness
SOP: 2Q / 3Q 2005
SOP: 1Q 2005
20 Note: Products in red are produced in Mexico/Honduras.
21. Major North American Launches
Chevy HHR Ford Fusion / Milan / Zephyr
Cockpit, Flooring & Acoustics Seats
SOP: 2Q 2005 SOP: 3Q 2005
Ford Explorer / Mountaineer
Dodge Ram Truck
Seats, Doors, Electrical Distribution
Seats, Doors, Instrument Panel,
SOP: 3Q 2005
Overhead Systems
SOP: 3Q 2005
21 Note: Products in red are produced in Mexico/Honduras.
22. Americas – 2005 Strategy
Improve quality and customer service
Reduce costs – get leaner
Support flawless launches
Identify new growth opportunities
Serve as a catalyst for our customer’s success
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24. Europe / Africa
20 Countries
37,000 Employees
103 Locations
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25. Overall in Europe,
We have Grown Sales and Steadily Improved Margins
Europe CPV European Financials
Growing sales and
$351
improving margins
$310
Positive cash flow
$247
Expanding our low-cost
manufacturing and sourcing
in Eastern Europe and
Northern Africa
2002 2003 2004
3rd Consecutive Year Of Improving Financials
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26. Asia
7 Countries
9,000 Employees
38 Locations
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27. Asia Footprint
Major presence in China, India, Korea, Japan,
Thailand and the Philippines
Significant infrastructure in place
7 engineering centers in the region
Establishing relationships and growth through joint
ventures
12 joint ventures in China
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28. Continuing to Diversify Our Customer Mix
Non-Traditional Big Three* Recent Customer Diversification
VW/Audi
- Seats and electronics in Europe
- Audi A6: seats in China
46%
Hyundai
- Sonata: seats & wire harness award in NA
- Several electronics awards (TPMS) in NA
- Tucson: seats in Korea
- Tucson/Sonata: seats in China
19%
Nissan
- Global seating with JV partner, Tachi-S
- Electrical distribution program in Europe
Toyota
- Tundra: interior trim award in NA
2004
1994 - Aygo: seats (Toyota/PSA JV) in Europe
* Excludes affiliates of GM (other than Opel), Ford and DaimlerChrysler.
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29. We are Rapidly Growing Our Business
in Asia and with Asian Automakers Globally*
(in millions)
$1,800
$1,250
$850
2002 2003 2004 Future
Lear’s Asian Sales More Than Doubled From 2002 To 2004;
Solid Growth Expected To Continue
* Consolidated and unconsolidated sales. Please see slide titled “Forward-Looking Statements”
at the end of this presentation for further information.
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30. Major International Launches
Audi A6 - China
Seats
BMW 3 Series
SOP: 1Q 2005
Seats, Electronics
SOP: 1Q 2005
Nissan Serena Peugeot 407 Coupe
Electrical Distribution Seats
SOP: 2Q 2005 SOP: 2Q 2005
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31. International – 2005 Strategy
Continue quality and customer service focus
Execute growth priorities and ensure appropriate
program profitability
Implement strategic footprint plan, including the
expansion of low-cost opportunities
Finalize terminal and connectors business
integration
Utilize advance sales team and technology board
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32. Forward-Looking Statements
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding anticipated financial results. Actual results may differ materially from anticipated results
as a result of certain risks and uncertainties, including but not limited to, general economic conditions in the markets in which
the Company operates, fluctuations in the production of vehicles for which the Company is a supplier, labor disputes involving
the Company or its significant customers or suppliers or that otherwise affect the Company, the Company’s ability to achieve
cost reductions that offset or exceed customer-mandated selling price reductions, the outcome of customer productivity
negotiations, the impact and timing of program launch costs, the costs and timing of facility closures, business realignment or
similar actions, increases in the Company’s warranty or product liability costs, risks associated with conducting business in
foreign countries, competitive conditions impacting the Company’s key customers, raw material cost and availability, the
Company’s ability to mitigate the significant impact of recent increases in raw material, energy and commodity prices, the
outcome of legal or regulatory proceedings to which the Company is or may become a party, unanticipated changes in free
cash flow and other risks described from time to time in the Company’s Securities and Exchange Commission filings.
This presentation also contains information on the Company’s sales backlog. The Company’s incremental sales backlog
reflects: anticipated net sales from awarded new programs, less net sales from phased-out and cancelled programs. The
calculation of backlog does not reflect customer price reductions on existing or newly-awarded programs. The three-year
backlog may be impacted by various assumptions embedded in the calculation, including vehicle production levels on new and
replacement programs, foreign exchange rates and the timing of program launches.
In addition, the full-year 2005 per share earnings guidance is based on an assumed 73 million shares outstanding, including 4.8
million shares related to the outstanding contingently convertible debt.
The forward-looking statements in this presentation are made as of the date hereof, and the Company does not assume any
obligation to update them.
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