Welcome and thank you for standing by. At this time all participants are in a listen-only mode. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect. I will now turn the conference over to Mike Heifler. Thank you. You may begin.

Thank you, Denise. Good morning, everyone, and thank you for joining us. The press release and presentation slides for our call today have been posted to the Investors section of our website at adient.com. This morning, I'm joined by Jerome Dorlack, Adient'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 Q1 financial results and provide insights on our outlook for the rest of fiscal 2025. After our 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 those forward-looking statements made on the call. Please refer to Slide 2 of the presentation for our complete Safe Harbor Statement. In addition to the financial results presented on a GAAP basis, we will be discussing non-GAAP information that we believe is useful in evaluating the company's operating performance. Reconciliations for these non-GAAP measures to the closest GAAP equivalent can be found in the Appendix of our full earnings release. And with that, It's my pleasure to turn the call over to Jerome.

Thanks, Mike. Good morning, everyone, and thank you for joining us today. Today, we will review our first quarter results and share additional insights into the industry landscape and how we see fiscal 2025 shaping up. In addition, we will give you a high-level overview of current business developments and then turn it over to Mark to review the financials on our full-year outlook. Turning now to Slide 4, we are off to a solid start in fiscal 2025 with improved business performance first year ago, allowing us to mitigate ongoing customer volume and mixed headwinds. As a result, we were able to contain decremental margins to approximately 12% below our typical 18% on a 5% year-over-year decline in revenue. We achieved $196 million of adjusted EBITDA and generated $45 million in free cash flow. As we signaled on our Q4 call, we anticipated significant headwinds in our fiscal first quarter. Owing to inventory de-stocking at our major Detroit-based customers, in the Americas, an ongoing European customer production mix headwinds. In Asia, we experienced soft demand from our core customer base in China, including luxury and Japanese OEMs. In this market, we also saw a promising new startup cease operations. I'll discuss the industry dynamics in China in the next two slides. All things considered, the quarter was in-line with our internal expectations. We also continued to allocate capital in a disciplined manner and bought back another 25 million in stock in Q1, bringing total share repurchases so far in fiscal 2025 and 2024 to 300 million. Our balance sheet remains strong with ample liquidity, including $860 million of cash on hand at the end of Q1. I'm also proud to share that we have released our 2024 sustainability report, where we have highlighted several notable accomplishments, which I will…

Thanks Jerome. Let's jump in with financials on Slide 11. Adhering to our typical formats, the page shows our reported results on the left side and our adjusted results on the right side. We will focus our commentary on the adjusted results, which exclude special items that we view as either one time in nature or otherwise skew important trends in underlying performance. Details of all adjustments for the quarter are in the appendix of the presentation. High level for the quarter adjusted EBITDA was $196 million down 9% year-on-year. Our decremental performance on $165 million decrease in revenue from a year ago was about 12% which reflects our resilience and ability to drive business performance to mitigate external pressures. Worth noting that our underlying equity income remains quite strong despite this quarter's results being impacted by a one-time $12 million retroactive change to our Kuiper JV agreement. Adient reported adjusted net income of $23 million or $0.27 per share. I'll cover the next slides rather quickly since details of the results are included on the slides. This should ensure we have adequate time for Q&A. Starting with revenue on Slide 12, we reported consolidated sales of approximately $3.5 billion, a decrease of $165 million compared with Q1 fiscal year 2024. The primary driver of the year-on-year decrease was lower volumes and pricing of $160 million, resulting from lower customer production. FX was a slight headwind, call it $5 million in the quarter. Focusing on the right hand side of the slide, Adient’s consolidated sales were lower in Americas and EMEA, while sales in Asia were flat year-on-year. In The Americas, lower sales mostly in line with the market were driven by lower volumes from inventory destocking actions at certain U.S. based customers particularly in the key full size truck…

Thank you. [Operator Instructions] Our first question comes from Dan Levy with Barclays. Your line is open.

Hi, good morning. Thank you for taking the questions. First, maybe if we could just start with a bit of a housekeeping question. Perhaps you could just give us a sense of what you were assuming now on the different end markets? I know you trimmed your outlook on China and EMEA. Are you just -- are you in-line with the third-party data forecasters? And maybe you could just comment a bit more on some of the customer mix dynamics within your guidance?

Yes, Dan. Good morning. Yes, I'd say that the current outlook does reflect latest outlook for production based on S&P. Obviously we do tweak it here and there based on what we know from the customers. But yes, all-in-all, I'd say it's generally in-line. When I think about mix, and we mentioned mix over in China for example, certain of the EVs that are coming to market tend to be at a lower margin versus the outgoing product. And so that's the negative mix that you're seeing over in that region.

Yes. The only -- just maybe to build on what Mark said, given the nature of our business and the proximity to our customers, just in time aspect of it. We do run on, call it EDIs or customer releases for the nearest quarter. So we do build what would be kind of our quarter we are in right now, where our Q2 is basically EDI based and then Q3 and Q4 would be S&P based from that standpoint.

Got it. Thank you. As a follow-up, if we could maybe double click on the business performance. And I know in the past, you've sort of laid out a few different line items. So maybe just in the first quarter, what was driving that, and I believe that was a bit more outsized in Asia. How much of this is just continuous improvement versus customer recoveries? And then what levers do you have to accelerate the business performance, if some of the macro headwinds remain challenging?

Yes. So I will start there. So when I think about business performance, Dan and there is quite a few items within that bucket, right? But what we called out obviously for Q1, launch costs were down in certain of the regions. When I look at ops waste, freight costs, right those are all contributors to positive business performance. Net material margin, our ability to basically get pricing for the customers, et cetera, right? Those are all things that I would say that are in that bucket that we basically are driving [toward] (ph). And obviously, that offsets certain of the other, what I’d say, headwinds that you may get, whether it's labor inflation, et cetera, right? So those are the buckets. When I think about our ability to pull things forward, we are continuously working with the customers. We're continuously looking to see what type of automation we could add to the plants to make it more efficient. So I'd say, we've got the playbook, we'll continue to execute that. I think if you looked at our results in '24 on the business performance line. And again, what we're expecting now for 2025, showing good results in terms of what the company is going to be able to do in terms of driving that forward.

And just to build on what Mark said when you ask about our ability to accelerate, I think '24 was a very good proof-point of that. I mean, as we saw -- some of the macro headwinds really building, especially in the back half of the year, we saw in The Americas in particular, a lot of the inventory de-stocking taking place. We saw a lot of the large pickup truck segments that we were on, starting to face a lot of headwinds, I mean you really saw us ramp up business performance. You saw us taking what would be a normal decremental for the company at the 17% to 18% range, and we were really able to hold that throughout the back half of the year closer to kind of that 11% to 12%, and that's really through incremental business performance. And I mean, that's what we are able to do through additional, whether it be customer recoveries, whether it is through additional operational belt tightening. We drove a lot of, I would call it, automation opportunities in the back half of last year, taking out both direct and indirect labor through operations, that's actually starting to pay benefits now in fiscal year '25, being able to hold some of those decrementals. So I mean, it is a resilient business model, the Adient operating model, we like to call it, and that's what's allowing us to manage through some of these short-term macros that we see.

Great. Thank you.

The next question comes from James Picariello from BNP. Your line is open.

Hi guys. This is Jake on for James. Just first, can you help us think about the potential impact of any North American tariffs on your business, especially on some of your initiatives to move more of the value-add portion of the manufacturing components in Mexico? Thank you.

Yes. What we would say is, I mean we have, not unlike our competitors in the space or other Tier 1s, whether you go across the safety space, some of the electronic space, anyone in automotive, a significant Mexico footprint, certainly with our cut and sew operations we've talked about that in the past. Certainly, some of our metal operations that we have localized down into Mexico, as a result of the China tariffs, we moved that into Mexico. We now ship some of that north of the border. So it is not an insignificant amount of business that then transits its way into the U.S. I think what's important is we have action plans established by each one of our customers. We have now begun engaging in meaningful dialogue with those customers. The customers have a level of understanding of what the impact is. We've made it clear to them that this is not at a 25% level or even at a 10% level, a burden that Adient is prepared to take onto our P&L on an ongoing basis, and there will be a need for recovery that has to then be passed through the value chain. There's defined timetable for us to move through these processes with them, and we'll manage through this depending on what the administration enacts come February 1. And so we're working through that in a very timely and I would say, almost hourly basis in some cases.

Thank you. And then I think we are all impressed with the 7% base decrementals on the lower volume in Asia and Europe. But how should we think about incrementals and decrementals for further shifts in production this year? Thank you.

Yes. I'd say that the typical incremental margins for us are decremental is, call it 17%, 18%. As we showed in the first quarter, we were able to minimize that and get that down quite low, call it 12% or so. If we have a line of sight in terms of when that production is coming out, it affords us and allows us to basically make some changes in the operating patterns, which allows us to basically take those costs out and to contain those. It's really when you get the sudden shifts in production or the short notices of production coming out that hampers our ability to basically minimize those. So as we go through the rest of this year, we'll continue to work hard to keep those decrementals lower. I think our guidance is predicated on the fact that we will be successful in doing that. So we'll continue to run the playbook that we demonstrated in 2024 as well as in Q1. Thank you Jake.

Thank you. The next question comes from Colin Langan with Wells Fargo. Your line is open.

Hi guys. This is Kosta Tasoulis filling in for Colin. I just wanted to build off the tariff playbook again. Would you be able to maybe describe how your tariff playbook is better today relative to how you guys handled it in 2017?

I know that's a question of if it's better or worse. I think if you look at 2017, I think we were very effective in 2017. I mean, we entered 2017 with call it, somewhere between a $40 million to $60 million of gross exposure, and we sit now today with something of a net exposure in single digits. So I think we are very, very effective in what we're able to do from the [232 and 301] (ph) tariffs. If you look at the magnitude of where these tariffs stood at a 25% or even 10% range, it is a question of speed, and it took us -- when those came in somewhere in kind of a 12-month to 16-month range to work through that. Obviously, given the magnitude of these, we would need to work through this in a much more expeditious manner. So I think the difference between 2017 and now is the time and the speed at which we would need to work through in terms of efficacy of a solution. And so what 2017 did is it prepared us in terms of playbooks. I think it also prepared the industry and our customers in terms of how, not only Adient but also the entire supply base and the value chain, would be approaching and working through these types of solutions.

Thank you. And my second question is, I think your initial growth over market guidance in China is 6%. How is that shaping up in today's updated guidance?

Yes. So today's guidance, as we indicated, we would expect our sales to be flat to down versus last year, right? If you look at where the overall market is trending in China as Jerome mentioned in his portion of his prepared remarks. The market's up, but it is really attributed to the growth in BYD and exports, right? If you strip those out, obviously the market would be down. So again, I would say, that this year, slightly worse versus earlier expectations heading into 2025. But as Jerome also pointed out on the call, we did win $1 billion of new business last year that comes on board in '26 and '27, which then helps us drive growth in that region again as we get into 2026 and 2027.

Great. Thanks for taking my questions.

Thank you.

Thank you. [Operator Instructions] I am currently showing no further questions.

Okay. I want to thank everyone for your interest in Adient today, and we will be available for the rest of the day for follow-up questions. Feel free to reach out to me, Mike Heifler, Investor Relations at Adient. Thank you.

That does conclude today's conference. We appreciate your participation. Have a great day, and you may disconnect.