Borgwarner Inc. · NYSE:BWA
Borgwarner — Q1 2024 Earnings Presentation
25 slides from Borgwarner's earnings presentation, May 2, 2024
Slide 1: Q1 2024 Earnings Call Presentation
Q1 2024 Earnings Call Presentation May 2, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act that are based on management’s current outlook, expectations, estimates and projections. Words such as “anticipates,” “believes,” “continues,” “cou
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation contains information about BorgWarner’s financial results that is not presented in accordance with accounting principles generally accepted in the United States (“GAAP”). Such non-GAAP financial measures are reconciled to their closest GAAP financial mea
Slide 4: Agenda
Agenda ► Fred Lissalde Chief Executive Officer ► Craig Aaron Chief Financial Officer ► Q&A 4
Slide 5: Strong Execution During First Quarter, with Continued Focus on Long-term Value Creation
Strong Execution During First Quarter, with Continued Focus on Long-term Value Creation $ in millions, except EPS ▪ Delivered close to 7% organic sales Net Sales Adj. EPS* Free Cash Flow* growth Organic Sales* Increase of ~6.9% ▪ Solid margin performance 9.0% 9.4% supported by strong conversion on A
Slide 6: Additional eProduct Awards Across Portfolio
Additional eProduct Awards Across Portfolio Electric Torque Vectoring Disconnect 800V eMotors (eTVD) Systems ▪ Awards with Xpeng Motors, a leading Chinese ▪ Currently in production for the Polestar 3 SUV Smart EV company, for use on two upcoming with production for a major European OEM SUV models ex
Slide 7: Believe Foundational Portfolio Positioned for Outgrowth
Believe Foundational Portfolio Positioned for Outgrowth 2027 Estimated Combustion 2023 Foundational Sales >$12 Billion Content Opportunity Per Light Vehicle (COPV) Penetration Penetration Opportunity Opportunity in North on Hybrid America Architectures N.A. COPV • N.A. penetration • Efficiency $833
Slide 8: Resilient Product Portfolio Well-Positioned for Growth
Resilient Product Portfolio Well-Positioned for Growth Foundational Products eProducts Other Electric Intake & Engine Transmission Thermal EV Battery Turbos AWD/4WD ECUs Inverters Power Drive EGRs Timing Products Mgt. Gearboxes Systems Electronics Motors Combustion Hybrid Electric 8
Slide 9: Q1 2024 Net Sales Walk
Q1 2024 Net Sales Walk $ in millions ▪ Organic sales* increased ~7% supported by: Q1 2023 net sales $3,383 ▪ Europe – Growth in battery systems, other eProducts and all- FX $(32) wheel drive ▪ China – Growth in HV coolant Organic net sales change* $233 heaters, eMotors and all-wheel drive Acquisitio
Slide 10: Financial Results & Adj. Operating Income
Financial Results & Adj. Operating Income $ in millions ($ in millions, except per Q1 2023 adj. operating share amounts) Three months ended $305 income* Non-GAAP Financial March 31, Information (Continuing 2024 2023 Operations) FX $(8) Net sales $3,595 $3,383 Organic change & Adj. operating income*
Slide 11: 2024 Outlook and Other Items
2024 Outlook and Other Items $ in millions, except EPS Full-year Net Sales Outlook ($M) Market & Earnings Outlook Prior Guidance 2024 Outlook 9.6% 2023 net sales Adj. Operating Margin* $14,198 Organic growth* 1% to 5% 2% to 5% FX $(100) eProduct sales** $2.5B to $2.8B $2.5B to $2.8B Organic net sale
Slide 12: Strong Liquidity and Expected Free Cash Flow Generation Enables Disciplined Capital Deployment
Strong Liquidity and Expected Free Cash Flow Generation Enables Disciplined Capital Deployment $767M $733M BorgWarner’s Balanced Capital Allocation Approach $500M Since 2020 Additional authorization Buybacks ~$733 million Dividends ~$623 million Market Cap of PHINA at Spin-off ~$1.7 billion $267M To
Slide 13: Thank You
May 2, 2024 Q1 2024 Earnings Call Presentation THANK YOU
Slide 14: Appendix
APPENDIX BORGWARNER
Slide 15: 2024 Planning Assumptions
2024 Planning Assumptions ▪ CapEx $800-$850 million ▪ Adjusted tax rate for ongoing operations ~24% 15
Slide 16: 2024 Light Vehicle Market Expectations
2024 Light Vehicle Market Expectations LV Units in millions BorgWarner Global Market North America Europe China FY’23 FY’24 Actual Est. 90.4 88.8 to 91.3 Electric Electric ~12% FY’23 FY’24 FY’23 FY’24 FY’23 FY’24 ~15% Actual Est. Actual Est. Actual Est. Hybrid ~20% Hybrid ~24% 28.9 to 29.9 28.7 Comb
Slide 17: BorgWarner Global Production Outlook (2024 vs. 2023)
BorgWarner Global Production Outlook (2024 vs. 2023) Actual & Estimated Production Totals (in Millions of Units) North America Europe China Total 2023 2024 2023 2024 2023 2024 2023 2024 Light Vehicle 15.7 15.8 to 16.1 17.9 17.1 to 17.5 28.7 28.9 to 29.9 90.4 88.8 to 91.3 Commercial Vehicle 0.7 ~0.6
Slide 18: First Quarter Reconciliation to US GAAP
First Quarter Reconciliation to US GAAP Adjusted Operating Income and Operating Margin The Company defines adjusted operating income as operating income adjusted to exclude the impact of restructuring expense, merger, acquisition and divestiture expense, intangible asset amortization expense, other
Slide 19: First Quarter Reconciliation to US GAAP
First Quarter Reconciliation to US GAAP Adjusted Earnings Per Diluted Share The Company defines adjusted earnings per diluted share as earnings per diluted share adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued o
Slide 20: First Quarter Organic Net Sales Change
First Quarter Organic Net Sales Change Organic Net Sales Change The Company defines organic net sales changes as net sales change year over year excluding the estimated impact of foreign exchange (FX) and the acquisitions of the smart grid and smart energy businesses of Hubei Surpass Sun Electric an
Slide 21: 2024 Adj. Operating Income and Adj. Operating Margin Guidance Reconciliation to US GAAP
2024 Adj. Operating Income and Adj. Operating Margin Guidance Reconciliation to US GAAP 21
Slide 22: 2024 Adj. Earnings per Diluted Share Guidance Reconciliation to US GAAP
2024 Adj. Earnings per Diluted Share Guidance Reconciliation to US GAAP 22
Slide 23: 2024 Organic Net Sales Change Guidance Reconciliation
2024 Organic Net Sales Change Guidance Reconciliation Organic Net Sales Change BorgWarner net sales change year over year excluding the estimated impact of foreign exchange (FX) and the acquisitions of the electric vehicle solution, smart grid and smart energy businesses of Hubei Surpass Sun Electri
Slide 24: Q1 2024, Q1 2023 and Full Year 2024 Free Cash Flow Reconciliation to US GAAP
Q1 2024, Q1 2023 and Full Year 2024 Free Cash Flow Reconciliation to US GAAP The Company defines free cash flow as net cash provided by operating activities minus capital expenditures, including tooling outlays. The measure is useful to both management and investors in evaluating the Company’s abili
Slide 25: Key Definitions
Key Definitions The terms below are commonly used by management and investors in assessing ongoing financial performance: Organic Net Sales Change. The Company defines organic net sales changes as net sales change year over year excluding the estimated impact of foreign exchange (FX) and the acquisi