Lear (LEA) investor relations material

Executive summary

• Q1 2026 revenue grew 5% year-over-year to $5.8 billion, with strong margin improvements and the highest adjusted EPS since 2019, driven by higher production, new business wins, and operational excellence in both Seating and E-Systems.

• Adjusted EPS rose 24% to $3.87, the highest since Q1 2019, supported by earnings growth and accelerated share repurchases.

• Free cash flow improved by $205 million year-over-year, enabling $75 million in share repurchases and supporting a $300 million annual target.

• Major new business awards with GM, Audi, Toyota, and Chinese automakers increased the two-year sales backlog by $250 million and expanded presence in North America, China, and Europe.

• Continued investment in automation, digital transformation, and operational excellence drove efficiency, cost savings, and competitive differentiation.

Financial highlights

• Net sales rose to $5.8 billion, up 5% year-over-year; organic sales up 3%.

• Core operating earnings increased to $297 million (5.1% margin), up from $270 million (4.9%) last year.

• Adjusted EPS was $3.87, up from $3.12 a year ago; net income attributable to shareholders was $172 million ($3.34 per share).

• Operating cash flow improved to $98 million from a use of $128 million last year.

• Free cash flow improved by $205 million year-over-year, reaching $(27) million.

Outlook and guidance

• Full-year 2026 net sales guidance: $23.2–$24.0 billion, with core operating earnings of $1.03–$1.2 billion and adjusted EBITDA of $1.65–$1.82 billion.

• Free cash flow guidance of $550–$650 million; capital expenditures projected at $660 million.

• Guidance maintained despite tariff-related revenue headwinds and industry production expected to decline about 2% year-over-year.

• Margin expansion targets: 40 basis points for Seating, 80 basis points for E-Systems.

• Outlook excludes potential future tariff changes or major production disruptions.