Garrett Motion Inc. · NASDAQ:GTX
Garrett Motion — Q2 2024 Earnings Presentation
28 slides from Garrett Motion's earnings presentation, Jul 25, 2024
Slide 1: Q2 2024 Financial Results
JULY 25 , 2024 Q2 2024 FINANCIAL RESULTS © 2024 Garrett Motion Inc.
Slide 2: Forward Looking Statements
Forward Looking Statements This communication and related comments by management may include “forward-looking statements” within the meaning of the U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact. Forward-looking statements represe
Slide 3: Achieved solid Q2 2024 results
Achieved solid Q2 2024 results Managing Industry Trends Capital Allocation Priorities • Net Sales of $890M (12)% vs. $1,011M Q2 2023, • Successfully issued 8-yr $800M Senior Unsecured (10)% at constant currency1 Notes and repriced 2021 USD Term Loan B • Global macros deteriorating, more volatility e
Slide 4: Cash generation translates to attractive capital allocation
Cash generation translates to attractive capital allocation Debt and Pref A Reduction Share Repurchases 1 Preferred A ($M) Debt ($M) Common Shares Outstanding (M) 3,000 350 2,650 Reduced debt by $394M 333 35 2,500 300 3,000 250 2,500 264 30 2,000 1,457 1,891 1,696 243 238 25 1,677 1,683 200 2,000 22
Slide 5: Success across all differentiated technologies
Success across all differentiated technologies Industrial Turbo 2-Stage Turbo Diesel Variable Nozzle Turbo Fuel Cell Compressor E-Powertrain E-Cooling Compressor Turbo and Hybrid Technologies Zero Emission Technologies Sustained business wins across our turbo and hybrid Continued to gain customer re
Slide 6: Quarterly financial trends: Q1 2023 – Q2 2024
Quarterly financial trends: Q1 2023 – Q2 2024 Reported Net Sales ($M) Adjusted EBITDA1 ($M) $1,011 $960 $945 $915 $890 49% 45% 47% 51% 49% 19% 21% $170 19% 19% $152 $145 $151 $150 19% 30% 32% 32% 28% 30% Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Europe North Asi
Slide 7: Net Sales bridge: Q2 2023 – Q2 2024
Net Sales bridge: Q2 2023 – Q2 2024 ($M) $1,011 (71) (36) (3) 8 (1) (18) $890 Q2 2023 Gasoline Diesel Commercial Aftermarket Other FX Q2 2024 Net Sales Vehicles Net Sales % change1 (15)% (14)% (2)% 7% (11)% (10)% Percentage of Reported Net Sales 42% 25% 18% 14% 1% • Q2 2024 Net Sales of $890M, down
Slide 8: Adjusted EBITDA bridge: Q2 2023 – Q2 2024
Adjusted EBITDA1 bridge: Q2 2023 – Q2 2024 ($M) $170 (34) (2) (7) $150 16 2 (22) 27 16.8% +$19M operating performance improvement year-over-year 16.9% Q2 2023 Volume Product Mix Pricing net Commodity, Productivity, R&D FX Q2 2024 Adjusted of Inflation Transportation SG&A - net Adjusted EBITDA1 Passt
Slide 9: Q2 2024 Adjusted EBITDA to Adjusted Free Cash Flow bridge
Q2 2024 Adjusted EBITDA 1 to Adjusted Free Cash Flow 1 bridge ($M) • Working capital use driven by declining light and commercial vehicle volume trends (52) • Expected to stabilize and improve in H2 (17) • Lower capital expenditures sequentially vs. $150 (17) $32M in Q1 2024, as expected (15) 13 • C
Slide 10: $800M Debt refinancing, $186M deleveraging and $65M share repurchase
$800M Debt refinancing, $186M deleveraging and $65M share repurchase Liquidity and Net Debt3 ($M) Successful Q2 financing activities • Issued $800M Senior Unsecured Notes due 2032 extending Q1 2024 Q2 2024 debt portfolio duration • Refinanced Euro and 2023 USD Term Loan B Unrestricted Cash1 196 98 •
Slide 11: 2024 Full year outlook
2024 Full year outlook Updated Outlook (July 25th) Prior Outlook (February 15th) Net Sales $3.50B to $3.65B $3.80B to $3.95B Net Sales Growth -9% to -5% -2% to +2% at Constant Currency 1 Net Income $245M to $285M $230M to $275M Adjusted EBITDA1 $583M to $633M $590M to $650M Net Cash Provided $355M t
Slide 12: Revised Adjusted EBITDA bridge: 2024 midpoint outlook
Revised Adjusted EBITDA 1 bridge: 2024 midpoint outlook ($M) $620 $620 $608 (6) (6) 44 (85) 27 (50) 64 +$58M incremental operating performance 16.0% 17.1% 17.0% Adj EBITDA1 Volume Product Mix Price net of inflation Commodity, Productivity, Adj EBITDA1 FX Equity Income Adj EBITDA1 Prior Midpoint Pass
Slide 13: We remain focused on value creation
We remain focused on value creation Industry Continue to be #1 Turbo player and leader in a technology-driven industry; Still investing Leadership in new Turbo technology especially for hybrids; Expanding into industrial applications Cash Proven performance through business cycles; Framework of 60%
Slide 14: On track for a solid 2024
On track for a solid 2024 • Delivered solid Q2 results through outstanding operating performance • Executing on our capital allocation priorities • Continuing our turbo success with new awards across all technologies • Accelerating momentum of our zero emission technologies • Adj. EBITDA1 midpoint n
Slide 15: Appendices
ADVANCING MOTION
Slide 16: Net Sales bridge: YTD 2023 – YTD 2024
Net Sales bridge: YTD 2023 – YTD 2024 ($M) $1,981 (81) (57) (23) 11 0 (26) $1,805 YTD 2023 Gasoline Diesel Commercial Aftermarket Other FX YTD 2024 Net Sales Vehicles Net Sales % change1 (9)% (11)% (6)% 5% 2% (8)% Percentage of Reported Net Sales 42% 26% 18% 13% 1% • Net Sales of $1,805M, down $176M
Slide 17: Adjusted EBITDA bridge: YTD 2023 – YTD 2024
Adjusted EBITDA1 bridge: YTD 2023 – YTD 2024 ($M) $338 (46) (4) (14) $301 30 (9) (38) 44 17.1% +$32M operating performance improvement year-over-year 16.7% YTD 2023 Volume Product Mix Pricing net Commodity, Productivity, R&D FX YTD 2024 Adjusted of Inflation Transportation SG&A - net Adjusted EBITDA
Slide 18: Income Statement
Income Statement ($ in millions) Q2 2024 Q2 2023 6M 2024 6M 2023 Net sales $890 $1,011 $1,805 $1,981 Cost of goods sold 705 809 1448 1590 Gross profit 185 202 357 391 Selling, general and administrative 61 63 125 119 expenses Other expense, net 3 1 4 2 Interest expense 62 29 93 56 Gain on sale of eq
Slide 19: Balance Sheet Summary
Balance Sheet Summary ($ in millions) Assets June 30, 2024 December 31, 2023 Cash and cash equivalents $98 $259 Restricted cash 1 1 Other 1,093 1,146 Total current assets 1,192 1,406 Property, plant and equipment-net 438 477 Deferred income taxes 199 216 Other 400 428 Total assets $2,229 $2,527 Liab
Slide 20: Summary of Cash Flows
Summary of Cash Flows ($ in millions) Q2 2024 Q2 2023 6M 2024 6M 2023 Net income $64 $71 $130 $152 Net cash provided by operating activities 126 164 210 256 Net cash provided by (used for) investing activities 46 (16) 18 (24) Net cash (used for) provided by financing activities (272) 42 (384) (2) Ef
Slide 21: Reconciliation of Constant Currency Sales % Change
Reconciliation of Constant Currency Sales % Change Garrett Q2 2024 Q2 2023 6M 2024 6M 2023 Reported sales % change (12%) 18% (9%) 13% Less: Foreign currency translation (2%) (1%) (1%) (3%) Constant Currency sales % change (10%) 19% (8%) 16% Gasoline Reported sales % change (17%) 32% (11%) 21% Less:
Slide 22: Reconciliation of Cash Flow from Operations to Adjusted Free Cash Flow
Reconciliation of Cash Flow from Operations to Adjusted Free Cash Flow and Adjusted Free Cash Flow Conversion ($ in millions) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Net cash provided by operating activities $92 $164 $74 $135 $84 $126 Expenditures for property, plant and equipment (8) (25) (
Slide 23: Reconciliation of Net Income to Adjusted EBITDA and Consolidated EBITDA
Reconciliation of Net Income to Adjusted EBITDA and Consolidated EBITDA1 LTM Q1 LTM Q2 ($ in millions) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 2024 2024 Net income $81 $71 $57 $52 $66 $64 $246 $239 Interest expense, net of interest income 27 24 47 54 29 61 154 $191 Tax expense 27 30 13 16 15
Slide 24: Reconciliation of Long-Term Debt to Net Debt and Related Ratios
Reconciliation of Long-Term Debt to Net Debt and Related Ratios ($ in millions) Q2 2024 Q1 2024 Long-term term debt $1,465 $1,633 Short-term term debt $7 $7 Deferred finance costs $25 $43 Gross Debt $1,497 $1,683 Cash and cash equivalents $98 $196 Net Debt $1,399 $1,487 Consolidated EBITDA LTM $620
Slide 25: Full Year 2024 Outlook Reconciliation of Net Sales Growth
Full Year 2024 Outlook Reconciliation of Net Sales Growth to Net Sales Growth at Constant Currency 2024 Full Year Low 2024 Full Year High End End Net sales (% change) (10%) (6%) Foreign currency translation (1%) (1%) Full Year 2024 outlook Net Sales Growth at Constant Currency (9%) (5%) © 2024 Garre
Slide 26: Full Year 2024 Outlook Reconciliation of Net Income to Adjusted EBITDA
Full Year 2024 Outlook Reconciliation of Net Income to Adjusted EBITDA 2024 Full Year Low 2024 Full Year High ($ in millions) End End Net income $245 $285 Interest expense, net of interest income * 148 148 Tax expense $82 $92 Depreciation 91 91 Full year 2024 outlook EBITDA $566 $616 Other non-opera
Slide 27: Full Year 2024 Outlook Reconciliation of Cash Flow to Adjusted Free Cash Flow
Full Year 2024 Outlook Reconciliation of Cash Flow from Operations to Adjusted Free Cash Flow 2024 Full Year Low 2024 Full Year High ($ in millions) End End Net cash provided by operating activities $355 $455 Expenditures for property, plant and equipment (87) (87) Net cash provided by operating act
Slide 28: Investors Media
Investors Media Eric Birge Amanda Jones +1 (734) 392-5504 +41796010787 Eric.Birge@garrettmotion.com Amanda.Jones@garrettmotion.com © 2024 Garrett Motion Inc.