Lear Corporation

Good morning, and welcome to the Lear Corporation's second quarter 2023 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mr. Ed Lowenfeld, Vice President of Investor Relations. Please go ahead, sir.

Thanks, Jeff. Good morning, everyone, and thank you for joining us for LEAR's second quarter 2023 earnings call. Presenting today are Ray Scott, LEAR president and CEO, and Jason Cardew, senior vice president and CFO. Other members of LEAR's senior management team have also joined us on the call. Following prepared remarks, we will open the call for Q&A. You can find a copy of the presentation that accompanies these remarks at ir.lear.com. Before we begin, I'd like to take this opportunity to remind you that as we conduct this call, we will be making forward-looking statements to assist you in understanding LEER's expectations for the future. As detailed in our safe harbor statement on slide two, our actual results could differ materially from these forward-looking statements due to many factors discussed in our latest 10Q and other periodic reports. I also want to remind you that during today's presentation, we will refer to non-GAAP financial measures You are directed to the slides in the appendix of our presentation for the reconciliation of non-GAAP items to the most directly comparable GAAP measures. The agenda for today's call is on slide three. First, Ray will review highlights from the quarter and provide a business update. Jason will then review our second quarter financial results. Finally, Ray will offer some concluding remarks. Following the formal presentation, we would be happy to take your questions. Now I'd like to invite Ray to begin.

Thanks, Ed. Now please turn to slide five, which highlights key financial metrics for the second quarter. There's positive momentum accelerated in the quarter. $6 billion of total company revenue was a quarterly record, an 18% increase compared to last year. Core operating earnings were the highest in over two years, increasing by 61% from last year. Adjusted earnings per share increased 86%. And operating cash flow improved significantly to $311 million for the quarter. Slide 6 summarizes key highlights from the quarter. Both seeding and eSystems continued their positive momentum, with significant improvements in operating results for the quarter. Sales growth outperformed global industry production, driven by strong growth in eSystems. The pace of new business awards continues to accelerate in eSystems. The average annual revenue of awards we have won to date is over 50% more than last year. In seating, we continue to build our thermal comfort capabilities. Today we announced we are working with Valeo to explore opportunities to integrate Valeo's HVAC expertise with Lear's thermal comfort technologies to optimize heating and cooling within a vehicle. This energy efficient solution is expected to improve comfort, for the occupants while extending the range for electric vehicles. As announced during our seeding product day, we entered into a partnership with Bentley to provide the first commercial application for our N2 comfort and wellness technology. And we continue to return cash to shareholders. Year to date, we have repurchased over $63 million worth of stock in addition to our quarterly dividend. In early July, we published our 2022 sustainability report, which highlights the progress we have made towards achieving our goals for climate, sustainable product development, and DEI initiatives. We continue to be recognized for our focus on our employees. Lear was named one of the top 200 best companies for work for by U.S. News and World Report. In late June, we were excited to hold our first ever seeding product day. where we outline the steps we are taking to extend our leadership position in seeding. During the event, we highlighted innovative technologies and strategic initiatives that will enable us to continue to grow market share and expand our segment-leading margins. Slide 7 highlights the major announcements we made at our seeding product day. During that event, we described our plan to deepen and widen our competitive moat in seeding. as we changed the sourcing model for thermal comfort components by offering a better value proposition to our customers. We increased Lear's 2023 outlook along with our long-term market share and margin targets in seating. We highlighted new business awards supporting the significant opportunities we have identified as we build out our thermal comfort systems business. Our first production award for Intube and FlexAir demonstrates our success bringing innovative technologies to market. Intu is our intuitive seating system, and FlexAir is our sustainable foam alternative that is 100% recyclable and delivers a CO2 emissions improvement of 50% over traditional foam. Turning to slide eight, I will provide some more details on the progress we have made in these systems. The second quarter's results marked our fourth consecutive quarter of year-over-year margin improvements in these systems, and the business is on track for further improvements in the second half of this year. Our focus on core products where we can provide our customers with unique solutions has resulted in an acceleration of business awards. In wiring, we have won new contracts for both high voltage and low voltage harnesses with several OEMs, including our first wiring award with BMW. Consistent with our strategy, we continue to diversify our customer base, and this award is another example of leveraging strong OEM relationships across business segments. A significant driver of the year-over-year growth in business awards is our electronics portfolio. As we mentioned last quarter, we expanded our leadership in high-performance BDUs with an award from Stellanus. During the quarter, we also began shipping pre-production parts for our ICBs to General Motors to support their planned ramp of the Ultium battery production. In total, 50% of our year-to-date awards are for electrification. We continue to execute our strategy to grow connection systems. During the quarter, we expanded our global engineered component capabilities by opening a plant in Morocco. We are also increasing our capabilities and capacity in China. These awards, along with the opportunities we are pursuing in the second half, put us on track to achieve our third straight year of $1 billion of sales backlog for eSystems. Now I'd like to turn the call over to Jason for the financial review.