I describe it to my clients this way. What you consume is the fuel used to move your body. If you put in junk, you’ll get junk out and won’t be able to do the things you’re asking your body to do. Exercise molds the body and changes it to adapt to the things you’re asking it to do. I don’t believe the two can exist without each other. So to answer your question, both diet (80% of the equation since you need good fuel to get good results) and exercise will lead to an improved body composition.