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fast forwardadvance relentlessly ®
world’s leading automotive interior supplier
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Strategic Evolution and Growth Plans
JPMorgan Harbour Auto ConferenceAugust 3, 2004
Strategic Evolution and Growth Plans
JPMorgan Harbour Auto ConferenceAugust 3, 2004
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Agenda
• Strategic EvolutionJim Vandenberghe, Vice Chairman
• Global Growth Plans Dave Wajsgras, SVP and CFO
• Q & A
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Strategic Evolution
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Strategic Evolution
Seat Components to Seat Systems
Seat Systems to Total Interior Capability
Profitability Grow the Business
Operational Excellence; Reduce Debt
1990-1994
1994-1999
1999-2003
Going forward
4
We have Diversified Our Product Mix…
Seating Systems68%
Seats and SeatingComponents
Electronics14%
Interior Systems18%
1994 Present
Seats and SeatingComponents
100%
5
North America59%
Europe36%
Diversified Our Geographic Mix…
Rest of World 5%
Europe17%
North America83%
1994 Present
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Asian Renault PSA GP
VWAll OtherFiat
BMW
DaimlerChrysler
And Diversified Our Customer Mix
Classic Ford & GM75%
All Other25%
1994 Present
Extended Ford & GM -Opel, Saab, Isuzu, Volvo, Jaguar and Land Rover
12%
Classic Ford & GM47%
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North AmericaMarket Share Rankings
Flooring & Acoustic Systems
Instrument Panels & Cockpit Systems
Electrical Distribution Systems
Seating Systems
Door Panels
Headliners#1
#1
#2
#2 #5
#3
#1 in Total Interiors#1 in Total Interiors
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North AmericaLear Content On Top Selling Vehicles
Source: Ward’s Automotive Reports, July 2004 and company data.
Lear Content on 29 of 30 Lear Content on 29 of 30 TopTop--Selling Vehicles in North AmericaSelling Vehicles in North America
1 Ford - Total F-Series Pickup 11 DCX - Caravan 21 Ford - Ranger
2 GM - Total Silverado Pickup 12 GM - TrailBlazer 22 DCX - Jeep Liberty
3 DCX - Ram Pickup 13 GM - Malibu 23 Toyota - Sienna
4 Toyota - Camry 14 Ford - Focus 24 GM Grand Am
5 Honda - Accord 15 Nissan - Altima 25 Toyota - Tacoma
6 Ford - Explorer 16 GM - Cavalier 26 Ford - Expedition
7 Toyota - Corolla/Matrix 17 Ford - Escape 27 Honda - Odyssey
8 Ford - Taurus 18 GM - Total GMC Sierra Pickup 28 Ford - Econoline
9 Honda - Civic 19 DCX - Jeep Grand Cherokee 29 Ford - Mustang
10 GM - Impala 20 GM - Tahoe 30 GM - Grand Prix
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Western EuropeMarket Share Rankings
Instrument Panels & Cockpit Systems
Electrical Distribution Systems
Seating Systems Door Panels
Headliners
#1 #3
#3
#4#3
Industry Leader in Seating; Industry Leader in Seating; Growth Opportunity in Instrument Panels and Cockpit SystemsGrowth Opportunity in Instrument Panels and Cockpit Systems
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Western EuropeLear Content On Top Selling Vehicles
Source: Based on available company and industry data.
Lear Content on 18 of 30 Lear Content on 18 of 30 TopTop--Selling Vehicles in Western EuropeSelling Vehicles in Western Europe
1 VW - Golf 11 Renault - Scenic 21 Opel - Meriva
2 Peugeot - 206/207 SW 12 Citroen - C3 22 Citroen - Xsara Picasso
3 Peugeot - 307/307 SW 13 VW - Polo 23 Mercedes E-class
4 Renault - Clio 14 BMW - 3 Series 24 Ford - Mondeo
5 Ford - Focus 15 Audi - A4/S4/RS4 25 Toyota - Corolla
6 Renault - Megane 16 VW - Passat 26 VW - Touran
7 Opel - Corsa 17 Toyota - Yaris 27 Opel - Vectra
8 Fiat - Punto 18 Fiat - Panda 28 VW - Ibiza
9 Ford - Fiesta 19 Opel - Zafira 29 Ford - Focus C-Max
10 Opel - Astra 20 Mercedes C-class 30 Nissan - Micra
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Number of Nameplates
124
190
241267
1974 1984 1994 2004
115%115%
Evolution of North American Automotive Trends
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New / Redesigned & Freshened Vehicles
25446991Total
23111011European
11 2342Korean
71 7102331Japanese OEMs
12415303247Domestic OEMs
Total2008200720062005
229
Evolution of North American Automotive Trends
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Percent of Vehicle Sales over US $30,000
5%
18%
33%
1990 1995 2003
Evolution of North American Automotive Trends
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Lear is Well Positioned in the Fastest Growing Lear is Well Positioned in the Fastest Growing Segment of the Automotive IndustrySegment of the Automotive Industry
Profitable Global Growth Strategy
Interiors are the fastest growing automotive segment
Intense focus on improving interiors by all major automakers
Interiors are the fastest growing automotive segment
Intense focus on improving interiors by all major automakers
Deliver record sales backlog (supports ≈ 5% + annual growth)
Awarded General Motors’ first total interior integrator program
Accelerate new product innovations (e.g., IntelliTireTM)
Pursue strategic acquisitions (e.g., Grote & Hartmann)
Win new business in Asia and with Asian OEMs globally
Deliver record sales backlog (supports ≈ 5% + annual growth)
Awarded General Motors’ first total interior integrator program
Accelerate new product innovations (e.g., IntelliTireTM)
Pursue strategic acquisitions (e.g., Grote & Hartmann)
Win new business in Asia and with Asian OEMs globally
Industry FocusIndustry Focus
Lear OpportunityLear Opportunity
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Global Growth Plans
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Leverage our leadership
position in total interiors in North
America
Improve our business
structure and grow our market share in Europe
Aggressively expand our presence in
Asia and with Asian OEMs
globally
Profitability Grow Our Business WorldwideProfitability Grow Our Business Worldwide
A Consistent, Disciplined Strategy
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Record Sales Backlog
$750
$1,250
$1,000$900
$500
2004 2005 2006 2007 2008
Cumulative
$750 $2,000 $4,400$3,900$3,000
(millions)
Record Backlog Driving Sales Growth and DiversificationRecord Backlog Driving Sales Growth and Diversification* Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information.
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First Total Interior Integrator Program
Total InteriorTotal InteriorIntegrator (TI)Integrator (TI)
Systems Systems IntegratorIntegrator
2006 Buick LeSabre / Cadillac DeVille$825 million in annual salesLear to provide total interior, including electrical distribution systems
Design OEM Lead Supplier Lead Engineering Shared Supplier Lead Sourcing OEM Directed Supplier Lead Manufacturing Supplier Supplier
Sub-Assembly Supplier Supplier
Sequencing Supplier Supplier
Working with other Major Automakers to Working with other Major Automakers to Win New Total Interior Integrator ProgramsWin New Total Interior Integrator Programs
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New Product Initiatives
ClearViewClearViewTMTMMediaConsoleMediaConsoleTMTM
IntelliTireIntelliTireTMTM OccuSenseOccuSense®®
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High quality producer with technical expertise
Improves overall competitiveness in electronics / electrical market
Provides avenue for growth and customer diversification
Acquisition Consistent with our Electrical/Electronics StrategyAcquisition Consistent with our Electrical/Electronics Strategy
Grote & HartmannGrote & Hartmann****Electronics / ElectricalGlobal Market Opportunity*
Electronics/Electrical Market
Wire Harness/ Terminals & Connectors
Add Body Electronics & Mechatronics
Add Safety Electronics
Add Audio, Infotainment
& Other
$18$25
$28
$44
(in billions)
* Based on internal Lear estimates** Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information.
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Wire HarnessTerminals & Connectors
Terminals & Connectors are an Integral Terminals & Connectors are an Integral Part of a Wire Harness AssemblyPart of a Wire Harness Assembly
Wire Harness Composition
Average Wire Harness Composition
Wiring / Assembly
Terminals & Connectors
40%
60%
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Grote & Hartmann Acquisition
≈ $275 million in revenue, with about 75% in Europe
Headquarters: Wuppertal, Germany; 1,900 employees
Major products: terminals & connectors and junction boxes
Major customers: VW, BMW, Ford, Opel, DCX, Renault, MAN and PSA group
≈ $275 million in revenue, with about 75% in Europe
Headquarters: Wuppertal, Germany; 1,900 employees
Major products: terminals & connectors and junction boxes
Major customers: VW, BMW, Ford, Opel, DCX, Renault, MAN and PSA group
Acquisition Expected to be Slightly Accretive in 2005*Acquisition Expected to be Slightly Accretive in 2005** Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information.
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Our Presence in Asia is Growing Rapidly*
China • 11 facilities • 1 engineering center• 21 customers • Seats, interiors, electrical
distribution, electronics, IP
Korea • 2 facilities• 1 engineering center • 2 customers • Seats
Japan• 3 engineering centers • 5 customers • Interior integration
Philippines • 4 facilities • 1 engineering center • 7 customers • Electrical distribution
Thailand• 2 facilities • 5 customers • Seats, seat trim,
door panels
India• 3 facilities • 1 engineering center • 4 customers • Seats, interior integration
* Includes facilities held through joint ventures
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Lear Awarded New Seat Business with Mazda
Effective June 1, 2004, Lear was awarded seats and seat component business for:
Mazda 6Mazda Tribute / Ford Escape
Expected annual sales of approximately $100 million*
Making Progress with North American TransplantsMaking Progress with North American Transplants
* Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information.
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2002 2003 2004 Future
Asia/Asian Automakers Revenue*
$850
$1,250
≈$1,600
Asian Sales About Double from 2002 to 2004;Asian Sales About Double from 2002 to 2004;Solid Growth Expected to ContinueSolid Growth Expected to Continue****
(millions)
* Consolidated and unconsolidated sales** Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information.
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Infrastructure Cost Reduction Actions
Low cost country strategy
Manufacturing Capacity
Sourcing
Selective in-sourcing of value-add components
Global Cost Technology Optimization initiatives
Leverage Lear’s scale and commonization expertise
“Lear flexible seating architecture”
ADVANCE RELENTLESSLY™
www.lear.comLEA
NYSEListed
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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, including changes in interest rates and fuel prices, 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 impact and timing of program launch costs, the costs and timing of facility closures or similar actions, increases in warranty or product liability costs, risks associated with conducting business in foreign countries, fluctuations in foreign exchange rates, adverse changes in economic conditions or political instability in the jurisdictions in which the Company operates, competitive conditions impacting the Company’s key customers, raw material cost and availability, the Company’s ability to successfully integrate the recently acquired Grote and Hartmann operations, the outcome of legal or regulatory proceedings to which we are 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.
In addition, the full year 2004 per share earnings guidance is based on an assumed 70.5 million shares outstanding and does not reflect the potential dilutive impact of the Company’s outstanding convertible senior notes.
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.
This presentation also contains information on the Company’s sales backlog. The Company’s incremental sales backlog reflects: (i) formally awarded new programs; (ii) targeted programs for which the Company believes there is a substantial likelihood of award; (iii) phased-out and cancelled programs; (iv) estimates regarding customer-mandated changes in selling prices; and (v) estimates of expected changes in vehicle content. Changes in any of these components may significantly impact the Company’s backlog. In addition, backlog may be impacted by various assumptions imbedded in the calculation, including vehicle production levels on new, replacement or targeted programs, foreign exchange rates and the timing of major program launches. For purposes of the backlog data included in this presentation, the Company has made various assumption, including the following: (1) North American vehicle production of 16.0 million units; (2) Western European vehicle production of 16.0 million units; (3) South American vehicle production of 1.9 million units; and (4) a Euro exchange rate of $1.20/Euro. Please refer to the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2003 for further information on the Company’s calculation of sales backlog.
Forward-Looking Statements
