Adient plc

Welcome to Adiant's third quarter 2026 earnings call. Parties will be on the listen-only mode until the question and answer session of today's call. I'd like to inform all participants that today's call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the call over to Linda Conrad. Thank you, and you may begin.

Thank you, Shirley. Good morning, everyone, and thank you for joining us. The press release and presentation slides for our call today have been posted to the investor section of our website at adiant.com. This morning, I'm joined by Jerome Dorlack, Adiant's president and chief executive officer, and Mark Oswald, our executive vice president and chief financial officer. On today's call, Jerome will provide an update on the business. Mark will then review our Q3 financial results and our outlook for the remainder of our fiscal year. After the prepared remarks, we will open the call to your questions. Before I turn the call over to Jerome and Mark, there are a few items I'd like to cover. First, today's conference call will include forward-looking statements. These statements are based on the environment as we see it today and therefore involve risks and uncertainties. I would caution you that our actual results could differ materially from these forward-looking statements made on the call. Please refer to slide two of the presentation for our complete safe harbor statement. In addition to the financial results presented on a gap basis, we will be discussing non-gap information that we believe is useful in evaluating the company's operating performance. Reconciliations for these non-gap measures to the closest gap equivalent can be found in the appendix of our full earnings release. and with that it is my pleasure to turn the call over to Jerome.

Thanks Linda. Good morning everyone and thank you for joining us today. I'll begin with a business update on our third quarter performance as well as provide an update on how we are managing through the current operating environment and why we remain confident in the strength of Adiant's operating model. Before that though, I want to take a moment to recognize our global team. Their unrelenting focus on execution launch discipline, customer responsiveness, and operational performance is what reinforces Adiant's position as a supplier of choice. Our strong relationships with our customers continue to drive new business awards and support the durability of our revenue base. I would also like to thank our customers for their continued trust and partnership. Their confidence in Adiant and their willingness to rely on us on some of their most important vehicle programs is something that we never take for granted. We remain committed to earning that trust every day through flawless execution, innovation, and operational excellence. With that, let's turn to the Q3 summary page. Our third quarter performance aligned with our internal expectations, even as external conditions pressured near-term results. Consolidated revenue was approximately $3.9 billion, up 5% year over year, while the adjusted EBITDA was $225 million, flat compared with prior year. The point I want to highlight is that the pressure we are seeing this year has been largely external and, in our view, temporary. Vehicle production remained relatively stable overall, But certain customer programs have faced headwinds, and the Middle East conflict drove macro-related pressure, including elevated commodity and freight costs and lower exports into the Middle East, primarily from Asia outside of China. In commodities and freight, specifically, costs remain elevated, but we are beginning to see signs of stabilization. Overall, we see these headwinds as manageable. Most importantly, our business performance remains solid. The operating model is delivering, our book of business remains strong, and we believe Adyen is well positioned to capitalize on top line growth as the external environment normalizes. We also demonstrated our disciplined approach to capital allocation during this quarter. We returned $30 million to shareholders through share repurchases in Q3. bringing year-to-date repurchases to $55 million, and we remain committed to our balanced capital allocation strategy as we move through Q4. Stepping back, Q3 was another quarter where the team executed well through volatility. The near-term headwinds put downward pressure on reported results, but the underlying performance of the business remained solid, and our operating model continues to position us well for future growth and Shareholder Value Creation. Moving now to the regional update on slide five. As we look across the business this quarter, what stands out is the resilience of our regions to deliver, even as conditions remain mixed across the global automotive industry. Each of our regions is managing through a combination of external pressures, customer-specific volume fluctuations and ongoing geopolitical impacts. At the same time, we are seeing encouraging evidence the actions we've taken to strengthen the business are translating into resilient performance and positioning us well for the future. Starting with the Americas, the region delivered a solid quarter supported by strong operational execution, favorable customer mix and disciplined cost management. We achieve sales growth and margin expansion despite temporary operational inefficiencies and customer driven interruptions. The team remains focused on controlling what we can control, including managing through elevated commodity and freight costs related to the Middle East conflict. At the same time, we are engaged in constructive discussions with customers around our ensuring opportunities. While we have nothing new to announce today, we believe Adiant is well positioned to benefit from these trends over time, given our North America manufacturing footprint, engineering capabilities, and strong embedded and durable customer relationships. Moving now to EMEA. The environment remains challenging. Lower customer production levels and ongoing market softness are pressuring volumes and profitability. That said, we are seeing the benefits of the restructuring and operational actions we've implemented over the past several years take hold. Business performance is improving, cost discipline remains strong, and we are working closely with customers to navigate the current environment. We also have line of sight on the roll off of our underperforming metals business, which we view as a positive contributor as we move into fiscal year 27. While there is still work to do, the team remains focused on improving the quality of the business and driving further operational progress. Moving to Asia. China remains a dynamic market. While the broader market has softened, our business once again outperformed and continues to benefit from strong positions with many of the customers gaining share in the market today. Customers such as NEO, EndLeap Motor, supported by new launches, premium content programs and continued customer confidence in adding its capabilities. In addition, our mix is rapidly moving closer to the industry profile. where approximately 70% of production is represented by local OEMs. While that shift has created some expected margin pressure, the impact is occurring more gradually than we initially anticipated. As a result, we do expect some additional margin compression as we move into fiscal year 27. While attention is typically focused on China, it's also important to highlight the strength of our business across the rest of Asia, which generates nearly $2 billion in annual revenue. We are a leading seeding supplier in the region and our combination of scale, customer diversity, and disciplined execution provides a solid foundation for continued profitable growth. For additional context, we have included an overview of this business in the appendix that we would encourage you to review. The strength of our Asia business outside of China, combined with our strong competitive position within China, continues to support attractive earnings and cash flow generation. Asia remains an accretive region for Adyen and will continue to be an important contributor to our long-term growth, profitability, and shareholder value creation. When we step back and look across the portfolio, We see a business that is executing well. The Americas is building momentum, EMEA is making measurable progress despite a challenging environment, and Asia is selectively growing with market leaders while maintaining profitability and supporting our long-term growth strategies. These regional trends reinforce our confidence and the strength of our operating model, the quality of our customer relationships, and our ability to create sustainable shareholder value over the long term. Moving to slide six, I would like to spend a moment on what sits behind these results, because our performance is not accidental, it is intentional. It is the direct product of Addian's position as a supplier of choice, and that status is earned every day across four dimensions. It starts with launch execution, consistent flawless launches are the foundation for everything else our proven ability to deliver complex programs on time with strong quality and responsiveness is what earns the confidence of our customers this is reinforced by our engineering and innovation we are involved in early vehicle development bringing innovative products that support content growth and partnering with customers to take costs out of the value stream. We strengthen that foundation further with our world-class footprint, which allows us to support customers globally. Collectively, this is what allows us to execute on programs consistently across regions with the scale and operational flexibility our customers need. Supplier of choice status matters. It converts directly into tangible business wins deeper customer relationships, and long-term shareholder value. Nowhere is that clearer than in customer recognition, and this quarter gave us several standouts. We were recently honored by both Toyota and Mitsubishi for being an outstanding supplier. And we are especially proud of the avid team in the Americas for once again being named GM Supplier of the Year for the fifth consecutive year, which reinforces the strength of our relationship and the confidence customers have in Adiant's execution. That same trust supported the recent Chevrolet Equinox conquest and onshoring win we announced last quarter. Furthermore, in China, Adiant recently received NIO's highest supplier recognition, the guardianship award. This reflects more than a decade of mutual trust and collaboration with NIO. Etienne was also named to NIO's primary and preferred partner list, recognizing us as NIO's primary seeding supplier. Etienne also received Cherry's highest supplier recognition, the Excellent Supplier Award, in recognition of our outstanding launch execution and support for the KP31 pickup export program. That award ties directly back to the importance of launch execution already mentioned. Customer recognition is the leading indicator. Being a trusted partner ultimately results in new business awards. On the next slide, we will walk you through a few of those as well as a few premium program launches. Slide seven highlights several proof points that support Adiant's future growth and durable revenue visibility. They reflect the strength of our customer relationships, our engineering capabilities, and our ability to launch complex seeding programs across regions. We are a winning business where our customers need a partner that can support them from design and engineering through launch and production. There are a couple themes here worth calling out. First, our platform wins reinforce the long-cycle nature of our revenue. Programs such as the Ram Dakota, Honda Pilot, and Tata Nexon are not only important awards for Adyen, but they are also important platforms for our customers. Being selected on these programs reflects the trust our customers place in Adyen and helps strengthen our long-term position on vehicles that are central to their future plans. We also want to highlight the commercialization of innovation and its growth across customers. As an example, ProForce Massage Flow is moving from concept to production across multiple customers in Asia, as shown with the recent awards on the Chang'an Avatar D518 and the Dongfang Voya H77B. And finally, our launch execution remains a competitive advantage. In EMEA, we are supporting vertically integrated launches with global OEMs, including the Volvo EX60 and Mercedes-Benz AMG EAGT. In Asia, we are launching complete seat systems featuring premium content, such as zero-gravity seating and power swivel on the lead motor D99. Taken together, these wins show the foundation of Adiant's operating model as delivering tangible commercial outcomes. You're leveraging engineering, manufacturing scale, vertical integration, and customer trust to secure higher value business and support future content growth. That is what gives us confidence in the durability of our revenue stream and our ability to convert execution into long-term value creation. Let's take a closer look at a specific example on slide eight. As you may recall, we mentioned the launch of the all new Nissan L Grand last quarter. It is worth spending a minute talking about this program because it represents the breadth of capabilities that Adiant brings to its customers. The L Grand is Nissan's first major redesign of this platform in more than a decade. and is an important program in the premium MPV segment. We're adding at this program showcases how we help customers differentiate their vehicles through content ripped seating solutions. The vehicle includes zero gravity seating, enhanced comfort and adjustability features and a unique third row architecture that combines passenger flexibility with cargo functionality. In addition, this program showcases Adiant's ability to provide our customers with vertical integration, which optimizes seating design and manufacturability across foam, trims, and jits, resulting in improved cost and quality for our customers. Looking a bit more internally at Adiant and the how of what we do, the L-Gram program also highlights our ability to drive manufacturing process innovations. A few examples of this is that the program has AI-enabled weld inspection, fully automated rail assembly, automated loading and unloading at the end of line and seat inspection. Our commitment to manufacturing process innovation helps improve quality, consistency, and operational performance. If you have a chance after the call, I'd encourage you to take a look at the short video linked on this page. which shows an example of our AI weld inspection process in action and provide the practical example of how we're applying automation and artificial intelligence on the plant floor, not only to improve quality, but also reduce costs to improve the competitive position of Adiant and its customers. Innovation at Adiant is not just about a few new features. It's about integrating engineering manufacturing, automation, and launch execution to help our customers win in the marketplace while enhancing the strength of our operating model. Moving to slide nine, in closing, before I hand it over to Mark, I want to come back to a point I made earlier. Add-in is executing through a volatile environment, external cost pressures, customer-driven disruptions, and uneven market conditions are creating near-term headwinds, but the underlying performance of our business remains resilient. Across the portfolio, we're focused on controlling what we control. That means advancing regional improvement plans, driving operational excellence, and investing in actions that strengthen the business over the long term. A good example is how we're responding to the production volatility we're seeing on certain customer programs, in particular full-size pickup trucks. Rather than simply absorbing these inefficiencies, we're accelerating investments in automation, digital manufacturing, and advanced material handling technologies. These initiatives are helping us improve productivity, increase operational flexibility, and reduce labor intensity. as well as better manage fluctuations in customer production schedules. Those are the kinds of self-help actions that enhance our competitiveness and strengthen our operating model regardless of the external environment. On the regional progress, the Americas is building momentum, AMEA is making progress to restructuring and customer collaboration, and Asia remains accretive to Adiant supported by strong customer relationships and growth with market leaders, creating a world-class competitive moat. At the same time, customer recognition, launch execution and new business awards reinforce the strength of our operating model and support our confidence in the outlook. Our focus remains on finishing fiscal year 26 strong, delivering our commitments and positioning Adiant for success in fiscal year 27 and beyond. With that, I will hand it over to Mark to walk us through the financial results and the outlook.