2007 Q3 TRW Auto Earnings Presentation

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    2007 Q3 TRW Auto Earnings Presentation - Presentation Transcript

    1. Third Quarter 2007 Conference Call Materials October 30, 2007 Materials Included Pages - Press Release 1-7 - Financial Summaries A1-A8 - Presentation P1-P24
    2. News Release TRW Automotive 12001 Tech Center Drive Livonia, MI 48150 Investor Relations Contact: Patrick R. Stobb (734) 855-3140 Media Contact: Manley Ford (734) 855-2616 TRW Reports Third Quarter 2007 Financial Results LIVONIA, MICHIGAN, October 30, 2007 — TRW Automotive Holdings Corp. (NYSE: TRW), the global leader in active and passive safety systems, today reported third- quarter 2007 financial results with sales of $3.5 billion, an increase of 16 percent compared to the same period a year ago. The Company reported third quarter net earnings of $23 million or $0.22 per diluted share, which compares to net earnings of $5 million or $0.05 per diluted share in the prior year period. “The growing market demand for our advanced active and passive safety products is helping to drive our solid 2007 financial performance,” said John Plant, president and chief executive officer. “We have seen a 16 percent increase in total sales related to electronic stability control, electric park brake, electrically powered steering, tire pressure monitoring and side and curtain airbag systems during the first nine months of the year. In addition to the success of these products, we continue to derive significant benefits from the diversity of having nearly 70 percent of sales outside the challenging North American market, aggressive cost reduction efforts and interest savings attributable to our 2007 debt recapitalization.” Mr. Plant added, “Safety continues to be a major focus of manufacturers and governments seeking to reduce driving related injuries and fatalities, and of consumers who want their vehicles equipped with technology that can help protect their families. As the global leader in safety with the most comprehensive portfolio of products on the market, we are at the forefront of development and are recognized as a solution provider, especially when it comes to integrated products that encompass both active and passive safety technologies.” 1
    3. Third Quarter 2007 The Company reported third-quarter 2007 sales of $3.5 billion, an increase of $480 million or 16 percent over the prior year period. The 2007 quarter benefited from higher customer vehicle production in Europe and China, continued growth of safety products in all markets (including a higher mix of lower margin modules) and the positive effect of foreign currency translation. These positive factors were partially offset by price reductions provided to customers. Operating income for third-quarter 2007 was $95 million, which compares favorably to $82 million in the prior year period. Restructuring and asset impairment expenses in the 2007 period were $13 million, which compares to $3 million in 2006. Excluding these expenses from both periods, operating income was $108 million in 2007, which represents an increase of 27 percent compared to the 2006 adjusted result. The year- to-year increase was driven primarily by higher product volumes and savings generated from cost improvement and efficiency programs, including reductions in pension and OPEB related costs. These positive factors were in part offset by pricing provided to customers and higher commodity costs. Net interest and securitization expense for the third quarter of 2007 totaled $56 million, which compares to $62 million in the prior year. The year-to-year decline can be attributed to the benefits derived from the Company’s 2007 debt recapitalization, which was completed during the second quarter of this year. Tax expense was $18 million in both 2007 and 2006. The effective tax rate in the 2007 quarter was 44 percent, which compares favorably to 78 percent in the prior year primarily due to a change in the Company’s geographical earnings mix. The Company reported third-quarter 2007 net earnings of $23 million, or $0.22 per diluted share, which compares to $5 million or $0.05 per diluted share in the 2006 period. Earnings before interest, securitization costs, loss on retirement of debt (where applicable), taxes, depreciation and amortization, or EBITDA, were $237 million in the third quarter, which compares to the prior year level of $213 million. 2
    4. Year-to-Date 2007 For the nine-month period ended September 28, 2007, the Company reported sales of $10.8 billion, an increase of $944 million or approximately 10 percent compared to prior year sales of $9.9 billion. The 2007 period benefited primarily from higher product volumes related to new product growth, robust industry sales in overseas markets and the positive effect of foreign currency translation. These positive factors were partially offset by the decline in North American customer vehicle production and price reductions provided to customers. Operating income for the 2007 year-to-date period was $475 million, which compares to $510 million in the prior year. The lower level of income can be attributed primarily to the first quarter, in which operating income declined $52 million. The significant decline in the first quarter resulted primarily from a weak industry production environment and an adverse mix of products sold, together with other issues, including underperformance in the Automotive Components segment. Helping to offset the first quarter decline, the Company reported year-to-year improvements in operating income in both the second and third quarters primarily due to savings generated from cost improvement and efficiency programs, including reductions in pension and OPEB related costs, higher product volumes and other positive items. These factors more than offset pricing provided to customers and higher commodity costs. Restructuring and asset impairment expenses in the nine-month year-to-date 2007 period were $32 million, which compares to $22 million in 2006. Net interest and securitization expense for the first nine months of 2007 was $177 million, which represents a decrease from the prior year result of $184 million. Benefits derived from the Company’s 2007 debt recapitalization more than offset the unfavorable impact of higher interest rates between the two periods. As a reminder, actions related to the debt recapitalization included a $1.5 billion Senior Note offering, the tender for substantially all of the Company’s outstanding $1.3 billion Notes and the refinancing of its $2.5 billion credit facilities. The Company incurred expenses of $155 million in the 2007 period related to these transactions. In the 2006 period, the Company incurred charges of $57 million also related to debt retirement. 3
    5. Tax expense in the first nine months of 2007 was $116 million, resulting in an effective tax rate of 77 percent, which compares to $134 million or 48 percent in the prior year. The effective tax rate excluding previously mentioned debt retirement expenses from both periods was 38 percent in 2007, which compares to 40 percent in 2006. Year-to-date 2007 net earnings were $34 million, or $0.33 per diluted share, which compares to $143 million or $1.38 per diluted share in the 2006 period. Net earnings excluding the previously mentioned debt retirement costs from both periods were $189 million or $1.84 per diluted share in 2007, which compares to $200 million or $1.93 per diluted share in 2006. EBITDA for the first nine months of 2007 was $890 million, which is lower than the prior year level of $899 million, primarily due to the lower level of operating income in the current year. Cash Flow and Capital Structure Third quarter net cash flow from operating activities was a use of $(158) million, which included the pay down of $127 million of outstanding borrowings under the Company’s U.S. based Accounts Receivable Securitization Facility (“Receivable Facility”). As previously reported, the Company’s second quarter 2007 cash flow benefited from proceeds related to borrowings under the Receivable Facility in the same amount. Third quarter net cash flow excluding the pay down of the Receivable Facility was a use of $(31) million, which compares to a source of $1 million in the prior year. Third quarter capital expenditures were $111 million compared to $132 million in 2006. For the nine-month period ended September 28, 2007, net cash flow from operating activities was a use of $(89) million, which compares to a source of $252 million in the prior year. The year-to-year comparison was negatively impacted by higher working capital needs in the 2007 period and a higher level of business in Europe and Asia where net payment terms are presently less favorable than in North America. Year-to- date capital expenditures were $339 million compared to $334 million in 2006. 4
    6. As mentioned previously, the Company completed its debt recapitalization plan during the second quarter of 2007. Transactions related to the plan included the refinancing of the Company’s $2.5 billion credit facilities on May 9, 2007. Prior to this transaction, on March 26, 2007, the Company completed its $1.5 billion Senior Note offering and repurchased substantially all of the existing $1.3 billion Notes through a tender offer. The Company incurred debt retirement charges of approximately $155 million during the year-to-date period related to these transactions. On February 2, 2006, the Company’s wholly owned subsidiary, Lucas Industries Limited, completed the tender for its outstanding GBP 94.6 million 10⅞% bonds. As a result of the transaction, the Company incurred a $57 million charge for loss on retirement of debt. As of September 28, 2007, the Company had $3,515 million of debt and $486 million of cash and marketable securities, resulting in net debt (defined as debt less cash and marketable securities) of $3,029 million. This net debt outcome, excluding the previously mentioned Receivable Facility repayment, is $144 million higher than the balance at the end of the second quarter primarily due to the seasonal cash outflow in the third quarter. 2007 Outlook With nine months of results reported, the Company refined its full year 2007 outlook, which now calls for sales of approximately $14.5 billion (including fourth quarter sales of $3.7 billion). The Company narrowed its estimates for net earnings per diluted share to be in the range of $0.60 to $0.80. Net earnings excluding debt retirement expenses of $155 million are expected to be in the range of $2.10 to $2.30. This guidance range reflects pre-tax restructuring expenses of approximately $45 million (including approximately $13 million in the fourth quarter). The effective tax rate after excluding debt retirement costs is expected to be in the range of approximately 40 to 42 percent. Lastly, the Company expects capital expenditures in 2007 to be slightly below 4 percent of sales. 5
    7. Third Quarter 2007 Conference Call The Company will host its third-quarter conference call at 9:00 a.m. (EDT) today, Tuesday, October 30, to discuss financial results and other related matters. To access the conference call, U.S. locations should dial (877) 852-7898, and locations outside the U.S. should dial (706) 634-1095. A replay of the conference call will be available approximately two hours after the conclusion of the call and accessible for approximately one week. To access the replay, U.S. locations should dial (800) 642-1687, and locations outside the U.S. should dial (706) 645-9291. The replay code is 19609851. A live audio webcast and subsequent replay of the conference call will also be available on the Company’s website at www.trw.com/results. Reconciliation to GAAP In addition to GAAP results included within this press release, the Company has provided certain information which is not calculated according to GAAP (“non-GAAP”). Management believes these non-GAAP measures are useful to evaluate operating performance and/or regularly used by security analysts, institutional investors and other interested parties in the evaluation of the Company. Non-GAAP measures are not purported to be a substitute for any GAAP measure and, as calculated, may not be comparable to other similarly titled measures of other companies. For a reconciliation of non-GAAP measures to the closest GAAP measure and for share amounts used to derive earnings per share, please see the financial schedules that accompany this release. About TRW With 2006 sales of $13.1 billion, TRW Automotive ranks among the world's leading automotive suppliers. Headquartered in Livonia, Michigan, USA, the Company, through its subsidiaries, operates in 28 countries and employs approximately 63,800 people worldwide. TRW Automotive products include integrated vehicle control and driver assist systems, braking systems, steering systems, suspension systems, occupant safety systems (seat belts and airbags), electronics, engine components, fastening systems and aftermarket replacement parts and services. 6
    8. All references to \"TRW Automotive\", “TRW” or the \"Company\" in this press release refer to TRW Automotive Holdings Corp. and its subsidiaries, unless otherwise indicated. TRW Automotive news is available on the internet at www.trw.com. Forward-Looking Statements This release contains statements that are not statements of historical fact, but instead are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those contained in forward-looking statements made in this release. Such risks, uncertainties and other important factors which could cause our actual results to differ materially from those contained in our forward-looking statements are set forth in our Report on Form 10-K for the fiscal year ended December 31, 2006 (the “10-K”) and on Form 10-Q for the quarters ended March 30 and June 29, 2007, and include: production cuts or restructuring by our major customers; work stoppages or other labor issues at the facilities of our customers or suppliers; non- performance by, or insolvency of, our suppliers and customers, which may be exacerbated by bankruptcies and other pressures within the automotive industry; the inability of our suppliers to deliver products at the scheduled rate and disruptions arising in connection therewith; interest rate risk arising from our variable rate indebtedness; loss of market share by domestic vehicle manufacturers; efforts by our customers to consolidate their supply base; severe inflationary pressures impacting the market for commodities; escalating pricing pressures from our customers; our dependence on our largest customers; fluctuations in foreign exchange rates; our substantial leverage; product liability and warranty and recall claims and efforts by customers to alter terms and conditions concerning warranty and recall participation; limitations on flexibility in operating our business contained in our debt agreements; the possibility that our owners’ interests will conflict with ours and other risks and uncertainties set forth under “Risk Factors” in the 10-K and in our other SEC filings. We do not intend or assume any obligation to update any of these forward-looking statements. ### 7
    9. TRW Automotive Holdings Corp. Index of Condensed Consolidated Financial Information Page Condensed Consolidated Statements of Earnings (unaudited) for the three months ended September 28, 2007 and September 29, 2006..............................A2 Condensed Consolidated Statements of Earnings (unaudited) for the nine months ended September 28, 2007 and September 29, 2006 ...............................A3 Condensed Consolidated Balance Sheets as of September 28, 2007 (unaudited) and December 31, 2006........................................................A4 Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 28, 2007 and September 29, 2006 ...............................A5 Reconciliation of GAAP Net Earnings to EBITDA (unaudited) for the three and nine month periods ended September 28, 2007 and September 29, 2006 ....A6 Reconciliation of GAAP Net Earnings to Adjusted Earnings (unaudited) for the nine months ended September 28, 2007........................................................................A7 Reconciliation of GAAP Net Earnings to Adjusted Earnings (unaudited) for the nine months ended September 29, 2006........................................................................A8 The accompanying unaudited condensed consolidated financial information and reconciliation schedules should be read in conjunction with the TRW Automotive Holdings Corp. Annual Report on Form 10-K for the year ended December 31, 2006 and Quarterly Reports on Form 10-Q for the periods ended March 30, 2007 and June 29, 2007, as filed with the United States Securities and Exchange Commission on February 23, 2007, May 2, 2007 and August 1, 2007, respectively.
    10. TRW Automotive Holdings Corp. Condensed Consolidated Statements of Earnings (Unaudited) Three Months Ended (In millions, except per share amounts) September 28, September 29, 2007 2006 Sales ........................................................................................... $ 3,495 $ 3,015 Cost of sales ............................................................................... 3,260 2,785 Gross profit............................................................................ 235 230 Administrative and selling expenses ........................................... 126 134 Amortization of intangible assets ................................................ 9 9 Restructuring charges and asset impairments ............................ 13 3 Other (income) expense — net ................................................... (8) 2 Operating income .................................................................. 95 82 Interest expense — net ............................................................... 54 62 Accounts receivable securitization costs..................................... 2 — Equity in earnings of affiliates, net of tax..................................... (5) (6) Minority interest, net of tax .......................................................... 3 3 Earnings before income taxes ............................................. 41 23 Income tax expense .................................................................... 18 18 Net earnings ....................................................................... $ 23 $ 5 Basic earnings per share: Earnings per share.................................................................... $ 0.23 $ 0.05 Weighted average shares ......................................................... 100.6 100.8 Diluted earnings per share: Earnings per share.................................................................... $ 0.22 $ 0.05 Weighted average shares ......................................................... 103.3 104.0 A2
    11. TRW Automotive Holdings Corp. Condensed Consolidated Statements of Earnings (Unaudited) Nine Months Ended (In millions, except per share amounts) September 28, September 29, 2007 2006 Sales ........................................................................................... $ 10,816 $ 9,872 Cost of sales ............................................................................... 9,921 8,923 Gross profit............................................................................ 895 949 Administrative and selling expenses ........................................... 401 403 Amortization of intangible assets ................................................ 27 27 Restructuring charges and asset impairments ............................ 32 22 Other income — net .................................................................... (40) (13) Operating income .................................................................. 475 510 Interest expense — net ............................................................... 173 182 Loss on retirement of debt .......................................................... 155 57 Accounts receivable securitization costs..................................... 4 2 Equity in earnings of affiliates, net of tax..................................... (20) (19) Minority interest, net of tax .......................................................... 13 11 Earnings before income taxes ............................................. 150 277 Income tax expense .................................................................... 116 134 Net earnings ....................................................................... $ 34 $ 143 Basic earnings per share: Earnings per share.................................................................... $ 0.34 $ 1.43 Weighted average shares ......................................................... 99.5 100.2 Diluted earnings per share: Earnings per share.................................................................... $ 0.33 $ 1.38 Weighted average shares ......................................................... 102.8 103.6 A3
    12. TRW Automotive Holdings Corp. Condensed Consolidated Balance Sheets As of (Dollars in millions) September 28, December 31, 2007 2006 (Unaudited) Assets Current assets: Cash and cash equivalents.................................................... $ 473 $ 578 Marketable securities............................................................. 13 11 Accounts receivable — net .................................................... 2,616 2,049 Inventories ............................................................................. 910 768 Prepaid expenses and other current assets .......................... 290 270 Total current assets.................................................................... 4,302 3,676 Property, plant and equipment — net......................................... 2,806 2,714 Goodwill...................................................................................... 2,285 2,275 Intangible assets — net.............................................................. 718 738 Pension asset............................................................................. 1,053 979 Other assets ............................................................................... 762 751 Total assets ............................................................................ $ 11,926 $ 11,133 Liabilities, Minority Interests and Stockholders’ Equity Current liabilities: Short-term debt ..................................................................... $ 161 $ 69 Current portion of long-term debt .......................................... 26 101 Trade accounts payable........................................................ 2,077 1,977 Accrued compensation.......................................................... 295 271 Other current liabilities .......................................................... 1,143 1,257 Total current liabilities................................................................. 3,702 3,675 Long-term debt ........................................................................... 3,328 2,862 Post-retirement benefits other than pensions............................. 638 645 Pension benefits......................................................................... 700 722 Other long-term liabilities............................................................ 842 723 Total liabilities......................................................................... 9,210 8,627 Minority interests ........................................................................ 128 109 Commitments and contingencies Stockholders’ equity: Capital stock.......................................................................... 1 1 Treasury stock....................................................................... — — Paid-in-capital ....................................................................... 1,170 1,125 Retained earnings ................................................................. 342 308 Accumulated other comprehensive earnings ........................ 1,075 963 Total stockholders’ equity........................................................... 2,588 2,397 Total liabilities, minority interests and stockholders’ equity .... $ 11,926 $ 11,133 A4
    13. TRW Automotive Holdings Corp. Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended (Dollars in millions) September 28, September 29, 2007 2006 Operating Activities Net earnings...................................................................................... $ 34 $ 143 Adjustments to reconcile net earnings to net cash (used in) provided by operating activities: Depreciation and amortization ........................................................ 408 381 Other — net..................................................................................... 16 (7) Changes in assets and liabilities, net of effects of businesses acquired: Accounts receivable — net, and receivable from affiliate............... (424) (94) Inventories ...................................................................................... (86) (38) Trade accounts payable ................................................................. (10) (112) Other assets.................................................................................... (9) 13 Other liabilities ................................................................................ (18) (34) Net cash (used in) provided by operating activities....................... (89) 252 Investing Activities Capital expenditures ......................................................................... (339) (334) Proceeds from asset sales and divestitures, net of acquisitions....... 32 9 Other — net ...................................................................................... (12) (1) Net cash used in investing activities ............................................. (319) (326) Financing Activities Change in short-term debt ................................................................ 66 (25) Net proceeds from revolving credit facility ........................................ 638 — Proceeds from issuance of long-term debt, net of fees .................... 2,584 28 Redemption of long-term debt .......................................................... (3,000) (291) Proceeds from exercise of stock options .......................................... 29 21 Net cash provided by (used in) financing activities....................... 317 (267) Effect of exchange rate changes on cash......................................... (14) 40 Decrease in cash and cash equivalents ........................................... (105) (301) Cash and cash equivalents at beginning of period ........................... 578 659 Cash and cash equivalents at end of period..................................... $ 473 $ 358 A5
    14. TRW Automotive Holdings Corp. Reconciliation of GAAP Net Earnings to EBITDA (Unaudited) The reconciliation schedule below should be read in conjunction with the TRW Automotive Holdings Corp. Annual Report on Form 10-K for the year ended December 31, 2006 and Quarterly Reports on Form 10- Q for the periods ended March 30, 2007 and June 29, 2007, which contain summary historical data. The EBITDA measure calculated in the following schedule is a measure used by management to evaluate operating performance. Management believes that EBITDA is a useful measurement because it is frequently used by securities analysts, institutional investors and other interested parties in the evaluation of companies in our industry. EBITDA is not a recognized term under GAAP and does not purport to be an alternative to net earnings (losses) as an indicator of operating performance, nor to cash flows from operating activities as a measure of liquidity. Additionally, EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to other similarly titled measures of other companies. Three Months Ended (Dollars in millions) September 28, September 29, 2007 2006 GAAP net earnings........................................................ $ 23 $ 5 Income tax expense ................................................ 18 18 Interest expense — net ........................................... 54 62 Accounts receivable securitization costs ................. 2 — Depreciation and amortization................................. 140 128 EBITDA ......................................................................... $ 237 $ 213 Nine Months Ended (Dollars in millions) September 28, September 29, 2007 2006 GAAP net earnings ....................................................... $ 34 $ 143 Income tax expense ................................................ 116 134 Interest expense — net ........................................... 173 182 Loss on retirement of debt ...................................... 155 57 Accounts receivable securitization costs................. 4 2 Depreciation and amortization ................................ 408 381 EBITDA ......................................................................... $ 890 $ 899 A6
    15. TRW Automotive Holdings Corp. Reconciliation of GAAP Net Earnings to Adjusted Earnings (Unaudited) In conjunction with the Company’s tender offer and repurchases of its then outstanding old notes, the Company recorded a loss on retirement of debt of $148 million during the nine months ended September 28, 2007. This loss included $112 million for redemption premiums paid, $20 million for the write-off of deferred debt issue costs, $11 million relating to the principal amount in excess of carrying value of the 9⅜% Senior Notes and $5 million of fees. The Company entered into its Fifth Amended and Restated Credit Agreement dated as of May 9, 2007, which provides for $2.5 billion in senior secured credit facilities, consisting of (i) a 5-year $1.4 billion Revolving Credit Facility, (ii) a 6-year $600 million Term Loan A-1 Facility and (iii) a 6.75-year $500 million Term Loan B-1 Facility (collectively, the “Facilities”). Proceeds from the Facilities were used to refinance $2.5 billion of existing senior secured credit facilities and pay fees and expenses related to the refinancing. The Company recorded a loss on retirement of debt related to the transaction of $7 million during the nine months ended September 28, 2007. The following reconciliation excludes the impact of the loss on retirement of debt. Nine Months Nine Months Ended Ended September 28, September 28, 2007 2007 Actual Adjustments Adjusted (In millions, except per share amounts) Sales ..................................................................... $ 10,816 $ — $ 10,816 Cost of sales ......................................................... 9,921 — 9,921 Gross profit ....................................................... 895 — 895 Administrative and selling expenses..................... 401 — 401 Amortization of intangible assets .......................... 27 — 27 Restructuring charges and asset impairments ..... 32 — 32 Other income — net.............................................. (40) — (40) Operating income.............................................. 475 — 475 Interest expense, net ............................................ 173 — 173 (a) Loss on retirement of debt .................................... 155 (155) — Account receivable securitization costs................ 4 — 4 Equity in earnings of affiliates, net of tax .............. (20) — (20) Minority interest, net of tax.................................... 13 — 13 Earnings before income taxes .......................... 150 155 305 Income tax expense ............................................. 116 — 116 Net earnings ..................................................... $ 34 $ 155 $ 189 Effective tax rate ................................................... 77% 38% Basic earnings per share: Earnings per share ............................................. $ 0.34 $ 1.90 Weighted average shares................................... 99.5 99.5 Diluted earnings per share: Earnings per share ............................................. $ 0.33 $ 1.84 Weighted average shares................................... 102.8 102.8 (a) Reflects the elimination of the loss on retirement of debt. A7
    16. TRW Automotive Holdings Corp. Reconciliation of GAAP Net Earnings to Adjusted Earnings (Unaudited) In conjunction with the Company’s February 2, 2006 repurchase of its subsidiary Lucas Industries Limited’s £94.6 million 10⅞% bonds due 2020 for £137 million, or approximately $243 million, the Company recorded a loss on retirement of debt of £32 million, or approximately $57 million. Such loss on retirement of debt carries zero tax benefit due to the Company’s tax loss position in the respective jurisdiction. The following adjustment excludes the loss on retirement of debt to show the impact as if this transaction had not occurred. Nine Months Nine Months Ended Ended September 29, September 29, 2006 2006 Actual Adjusted Adjustments (In millions, except per share amounts) Sales ................................................................... $ 9,872 $ — $ 9,872 Cost of sales........................................................ 8,923 — 8,923 Gross profit...................................................... 949 — 949 Administrative and selling expenses ................... 403 — 403 Amortization of intangible assets ........................ 27 — 27 Restructuring charges and asset impairments.... 22 — 22 Other income — net ............................................ (13) — (13) Operating income............................................ 510 — 510 Interest expense, net........................................... 182 — 182 (a) Loss on retirement of debt .................................. 57 (57) — Account receivable securitization costs .............. 2 — 2 Equity in earnings of affiliates, net of tax ............ (19) — (19) Minority interest, net of tax .................................. 11 — 11 Earnings before income taxes......................... 277 57 334 Income tax expense ........................................... 134 — 134 Net earnings ................................................... $ 143 $ 57 $ 200 Effective tax rate ................................................. 48% 40% Basic earnings per share: Earnings per share............................................ $ 1.43 $ 2.00 Weighted average shares ................................. 100.2 100.2 Diluted earnings per share: Earnings per share............................................ $ 1.38 $ 1.93 Weighted average shares ................................. 103.6 103.6 (a) Reflects the elimination of the loss on retirement of debt. A8
    17. Third Quarter 2007 Financial Results Presentation October 30, 2007
    18. Introduction Patrick Stobb Director, Investor Relations Business Summary John C. Plant President and Chief Executive Officer P2 © TRW Automotive Holdings Corp. 2007
    19. Safe Harbor Statement This presentation contains statements that are not statements of historical fact, but instead are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those contained in forward-looking statements made in this presentation. Such risks, uncertainties and other important factors which could cause our actual results to differ materially from those contained in our forward-looking statements are set forth in our Report on Form 10-K for the fiscal year ended December 31, 2006 (the “10- K”), and our Form 10-Q for the quarters ended March 30 and June 29, 2007, and include: production cuts or restructuring by our major customers; work stoppages or other labor issues at the facilities of our customers or suppliers; non-performance by, or insolvency of, our suppliers and customers, which may be exacerbated by bankruptcies and other pressures within the automotive industry; the inability of our suppliers to deliver products at the scheduled rate and disruptions arising in connection therewith; interest rate risk arising from our variable rate indebtedness; loss of market share by domestic vehicle manufacturers; efforts by our customers to consolidate their supply base; severe inflationary pressures impacting the market for commodities; escalating pricing pressures from our customers; our dependence on our largest customers; fluctuations in foreign exchange rates; our substantial leverage; product liability and warranty and recall claims and efforts by customers to alter terms and conditions concerning warranty and recall participation; limitations on flexibility in operating our business contained in our debt agreements; the possibility that our owners’ interests will conflict with ours and other risks and uncertainties set forth under “Risk Factors” in the 10-K and in our other SEC filings. We do not intend or assume any obligation to update any of these forward-looking statements. P3 © TRW Automotive Holdings Corp. 2007
    20. Summary Comments • Company’s strong financial performance continued during the third quarter: – Posted sales and earnings growth – Successfully completed strenuous launch schedule – Robust cost savings helped offset heightened commodity inflation pressures – Concludes solid nine months of operating results • TRW’s key attributes Driving Success: – Unrivaled breadth of active and passive safety products – Industry leading customer and geographic diversification – Globally competitive cost structure – Innovative technology – consistent flow of new and enhanced products to market) P4 © TRW Automotive Holdings Corp. 2007
    21. Growth Driven By Innovation • Ability to design, develop and deliver advanced products anywhere in the world • Invest over $1 billion annually in capital to engineer and manufacture new and Active Pipeline of existing products Products – in the • Growing range of products that are lighter Market and Under in weight and optimize energy use Development – Will • Market penetration rates for many Help Drive Future products, including electronic stability Growth… control, electrically powered steering, advanced air bags and electronic park brake systems expected to increase over the next several years P5 © TRW Automotive Holdings Corp. 2007
    22. New Products Helping to Drive Growth Sales of Featured Products Up 16% Side Curtain Airbag 2007 YTD(1) Electric Park Brake Electronic Stability Control Tire Pressure Monitor Electric Steering Systems (1) Includes only products listed on page. P6 © TRW Automotive Holdings Corp. 2007
    23. Third Quarter Vehicle Markets Vehicle Production (% changes based on year-over-year comparisons) Asia • China 21.6% North America • India 12.6% • Big 3 1.0% • Korea 9.5% Europe • EU OE 31.0% • Japan -1.4% • Asian OE 4.9% • West 2.1% • Total 4.0% • East 11.1% • Total 4.2% South America 20.2% Source: Light vehicle assumptions based on CSM Worldwide assumptions as of October 16, 2007. P7 © TRW Automotive Holdings Corp. 2007
    24. Financial Summary Year-to-Date (9 months) Third Quarter Sales Summary Sales Summary (mils.) (mils.) 16% 10% $10,816 $3,495 Growth Growth $9,872 $3,015 Q3 2006 Q3 2007 Q3 2006 Q3 2007 North America 12.4% North America 1.0% Europe 11.9% Europe 10.1% ROW 47.2% ROW 35.2% 2007 GAAP Results Net Earnings $34 million (b) Net Earnings Per Share $0.33 2007 GAAP Results Net Earnings $23 million 2007 Adjusted Results(a) Net Earnings Per Share(b) $0.22 (Excludes $155 million of debt retirement charges) Net Earnings $189 million Net Earnings Per Share(b) $1.84 (a) For adjusted results comparison and reconciliation to GAAP, please see slide P17. (b) Based on diluted shares P8 © TRW Automotive Holdings Corp. 2007
    25. Quarterly Developments • Steady pace of new business wins in place through 2010 provides measure of confidence in ability to deliver steady top line growth • New product announcements: Advanced Brake Efficient Comfort Regenerative ESC Mid-range Radar Caliper Design Control • Weighs up to 20% • Optimized HVAC • Expands portfolio of • Enhances fuel less than a control that uses Active Cruise Control efficiency and conventional brake algorithms to technologies and provides seamless caliper minimize energy provides affordable brake blending usage all-weather radar to the performance for hybrid mass vehicle market vehicles P9 © TRW Automotive Holdings Corp. 2007
    26. Quarterly Developments Heavy launch activity during the third quarter with 117 programs launched… • Chrysler Town & Country: Represents a broad range of TRW products including Modules, Power Chrysler Rack & Pinion Steering, Integral Park Brake, Booster Town & and Master cylinder, Driver, Passenger, Side and Country Curtain Air Bags, Seat Belt System, HVAC module • VW Tiguan: Electric Park Brake, Slip Control System, Airbag Electronic Control Unit, Sensors, Seat Belt VW System Tiguan • Ford Econoline Van: Corner Modules, Brake Calipers, Braking ECU, Steering Linkage • Fiat 500 - Braking, Steering Wheel, Seat Belts, Driver, Fiat 500 Curtain Airbag & Side Airbag • Toyota, Hyundai, Honda (Various): Tire Pressure Monitoring Systems through EnTire P10 © TRW Automotive Holdings Corp. 2007
    27. 2007 Operating Environment 2007 Industry Production Assumptions(1) (units in millions) North America Europe • Significant commodity 21.4 20.4 19.9 20.0 inflation pressures continue to 5.6 3.8 4.1 4.9 15.8 15.8 15.3 15.0 impact results, particularly in 4.4 5.0 the second half 5.2 5.5 • Reduced North American 16.2 15.8 15.8 15.5 11.4 10.8 10 9.5 vehicle production forecast by 100K due to expectation of ’03 lower Big 3 production ‘04 2005 2004 2006 2007 2004 2005 2006 2007 ‘05 ig 3 B T ransplants Western Eastern • Raised European vehicle South America Asia production forecast primarily due to higher volumes in 4.3 4.0 3.9 4.0 Eastern Europe 3.3 3.8 3.6 3.4 6.8 6.0 4.8 • Expect volume growth in 3.5 4.1 3.0 2.8 2.5 China and South America to 10.6 10.7 10.0 9.6 continue at a solid pace 2004 2005 2006 2007 2004 2005 2006 2007 Japan C hina Ko rea S o uth A s ia (1) Source: Light vehicle assumptions primarily CSM Worldwide and internal company estimates. P11 © TRW Automotive Holdings Corp. 2007
    28. 2007 Full Year Outlook Sales $14.5 billion Net Earnings per Diluted Share(a) $0.60 to $0.80 (Includes $155 million of debt retirement charges related to the 2007 debt recapitalization) Adjusted Net Earnings per Diluted Share(a) $2.10 to $2.30 (Excludes debt charges of $155 million) Restructuring Expenses (pre-tax) $45 million Capital Spending slightly less than 4% of sales Effective Tax Rate approx. 40% - 42% (excluding debt retirement charges) (a) Per share amounts based on weighted average diluted shares outstanding of approximately 103 million shares. P12 © TRW Automotive Holdings Corp. 2007
    29. Financial Overview Joseph S. Cantie Executive Vice President and Chief Financial Officer P13 © TRW Automotive Holdings Corp. 2007
    30. Third Quarter Sales Summary Segment Sales Total Sales US $ in millions US $ in billions $1,927 $1,632 $3.5 Chassis $1,100 OSS $983 $3.0 Auto Comp $468 $400 +16% 2006 2007 Q3 2006 Q3 2007 Geographic Sales Mix % of total sales 2007 2006 Q3 YOY Sales Comparison Rest of Rest of • Product Volumes World World 11% 14% • New Products • Vehicle Production • Modules Europe • Foreign Currency Europe North North 57% 55% America • Customer Pricing America 32% 31% P14 © TRW Automotive Holdings Corp. 2007
    31. Third Quarter Results (dollars in millions, except where noted) Q3 2007 Q3 2006 GAAP GAAP Results Results Sales $ 3,495 $ 3,015 Operating Income 95 82 Net Interest and Securitization 56 62 Loss on Retirement of Debt - - Equity in Earnings of Affiliates (5) (6) Minority Interest 3 3 Income Tax Expense 18 18 Effective Tax Rate 44% 78% Net Earnings $ 23 $ 5 Share Count 103.3 104.0 Earnings Per Share $ 0.22 $ 0.05 EBITDA(a) $ 237 $ 213 (a) Please refer to slide P22 for management’s rationale for using this metric and slide P23 for a reconciliation to GAAP. P15 © TRW Automotive Holdings Corp. 2007
    32. YTD (9 Month) Sales Summary Segment Sales Total Sales US $ in millions US $ in billions $5,865 $10.8 $5,335 Chassis $9.9 $3,483 $3,250 OSS Auto Comp $1,468 $1,287 +10% 2006 2007 YTD 2006 YTD 2007 Geographic Sales Mix % of total sales YTD YOY Sales Comparison 2006 2007 • Product Volumes Rest of Rest of • New Product Growth World World 10% 12% • Europe & ROW • NA Industry Production • Modules • Foreign Currency Europe Europe North North 56% 57% America America • Customer Pricing 34% 31% P16 © TRW Automotive Holdings Corp. 2007
    33. YTD (9 Month) Results (dollars in millions, except where noted) Year-to-Date 2007 Year-toDate 2006 GAAP Adjusting Adjusted GAAP Adjusting Adjusted Results Item Results Results Item Results Sales $ 10,816 $ - $ 10,816 $ 9,872 $ - $ 9,872 Operating Income 475 - 475 510 - 510 Net Interest and Securitization 177 - 177 184 184 (a) (b) Loss on Retirement of Debt 155 (155) - 57 (57) - Equity in Earnings of Affiliates (20) - (20) (19) - (19) Minority Interest 13 - 13 11 - 11 Income Tax Expense 116 - 116 134 - 134 Effective Tax Rate 77% 38% 48% 40% Net Earnings $ 34 $ 155 $ 189 $ 143 $ 57 $ 200 Share Count 102.8 102.8 103.6 103.6 Earnings Per Share $ 0.33 $ 1.84 $ 1.38 $ 1.93 EBITDA(c) $ 890 $ 899 (a) $155 million loss on retirement of debt related to the Company’s 2007 debt recapitalization. (b) $57 million loss on retirement of debt related to Lucas bond tender transaction. (c) Please refer to slide P22 for management’s rationale for using this metric and slide P24 for a reconciliation to GAAP. P17 © TRW Automotive Holdings Corp. 2007
    34. Capital Structure Summary Capital Structure Period-End Balances First Half Memo: Q3 US $ in millions 2006 2007 Q3 2007 2006 Cash $ 578 $ 275 $ 473 $ 358 Marketable Securities 11 9 13 11 Total Cash & Marketable Securities 589 284 486 369 (b) Total Debt $ 3,032 $ 3,169 $ 3,515 $ 3,038 Total Equity 2,397 2,500 2,588 1,472 Total Capital 5,429 5,669 6,103 4,510 Nebt Debt(a) (b) 2,443 2,885 3,029 2,669 Debt / Capital 56% 56% 58% 67% (a) Total Debt plus receivable facility borrowings (if applicable) less Total Cash & Marketable Securities. (b) Includes borrowings of $127 million under the U.S. receivable secruitization facility. Operating Cash Flow Capex US $ in millions US $ in millions 334 339 2006 2007 First Half GAAP Operating Cash Flow $ 251 $ 69 2006 A/R Securitization Proceeds - (127) 2007 Adjusted Operating Cash Flow $ 251 $ (58) Third Quarter 132 GAAP Operating Cash Flow $ 1 $ (158) 119 109 119 111 A/R Securitization Repayment - 127 83 Adjusted Operating Cash Flow $ 1 $ (31) Year-to-Date GAAP Operating Cash Flow $ 252 $ (89) A/R Securitization (no balance) - - GAAP Operating Cash Flow $ 252 $ (89) Q1 Q2 Q3 YTD P18 © TRW Automotive Holdings Corp. 2007
    35. Closing Comments • Fourth quarter prospects remain positive despite difficult industry conditions in North America and heightened commodity inflation pressures • Expect fourth quarter sales of $3.7 billion: – Based on vehicle production of 3.7 million units in North America and 5.5 million units in Europe – Expect approximately $13 million pre-tax restructuring – Foreign currency expected to provide major boost to fourth quarter sales • Look forward to reporting full year results in February P19 © TRW Automotive Holdings Corp. 2007
    36. “Driving Automotive Safety” P20 © TRW Automotive Holdings Corp. 2007
    37. Financial Reconciliation Section P21 © TRW Automotive Holdings Corp. 2007
    38. EBITDA Measurement • The accompanying unaudited consolidated financial information and reconciliation of GAAP net earnings to earnings before interest, income tax, accounts receivable securitization cost, loss on retirement of debt, and depreciation and amortization (“EBITDA”) should be read in conjunction with the TRW Automotive Holdings Corp. Form 10-K for the year ended December 31, 2006, and quarterly report on Form 10-Q for the quarters ended March 30 and June 29, 2007, as filed with the United States Securities and Exchange Commission. • The EBITDA measure calculated in this presentation is a measure used by management to evaluate operating performance. Management believes that EBITDA is a useful measurement because it is frequently used by securities analysts, institutional investors and other interested parties in the evaluation of companies in our industry. • EBITDA is not a recognized term under GAAP and does not purport to be an alternative to net earnings (losses) as an indicator of operating performance, or to cash flows from operating activities as a measure of liquidity. Additionally, EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Because not all companies use identical calculations, our presentation of EBITDA may not be comparable to other similarly titled measures of other companies. P22 © TRW Automotive Holdings Corp. 2007
    39. Third Quarter EBITDA (dollars in millions, except where noted) Q3 2007 Q3 2006 Net Earnings $ 23 $ 5 Income Tax Expense 18 18 Net Interest & Securitization 56 62 Depreciation & Amortization 140 128 EBITDA $ 237 $ 213 Memo: Restructuring & Asset Impairments Included in EBITDA $ 13 $ 3 P23 © TRW Automotive Holdings Corp. 2007
    40. YTD (9 Month) EBITDA (dollars in millions, except where noted) Year-to Year-to- Date 2007 Date 2006 Net Earnings $ 34 $ 143 Income Tax Expense 116 134 Net Interest & Securitization 177 184 Loss on Retirement of Debt 155 57 Depreciation & Amortization 408 381 EBITDA $ 890 $ 899 Memo: Restructuring & Asset Impairments Included in EBITDA $ 32 $ 22 P24 © TRW Automotive Holdings Corp. 2007

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