Slide 1: Q3 2024 Earnings Call Presentation
Q3 2024 Earnings Call Presentation October 31, 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 Margin, EPS and Cash Flow Growth
Strong Margin, EPS and Cash Flow Growth $ in millions, except EPS Net Sales Adj. EPS* Free Cash Flow* ▪ Lower organic sales driven by Organic Sales* declining industry production Decrease of ~5.1% 9.6% 10.1% ▪ Additional Foundational and Adj. Op Margin* Adj. Op Margin* eProduct program awards suppor
Slide 6: Awards Across Technology-Focused Portfolio
Awards Across Technology-Focused Portfolio Transfer Case Extension HV Coolant Heater High Performance Turbocharger ▪ Two transfer case awards with a major ▪ Three awards in Asia for a Chinese, a ▪ Award with General Motors for its North American OEM for their next Korean and a Japanese OEM Chevrolet
Slide 7: Sales Resiliency – Strong Diversification Across Products, Customers and Regions
Sales Resiliency – Strong Diversification Across Products, Customers and Regions YTD 2024 Segment Sales YTD 2024 Regional Sales PowerDrive RoW Americas Systems D3 Battery & China Charging Other Drivetrain Systems & Morse Systems China Americas Local Other Turbos & Thermal Europe Europe Technologies
Slide 8: Q3 2024 Net Sales Walk
Q3 2024 Net Sales Walk $ in millions ▪ Organic sales* down ~5% driven by: Q3 2023 net sales $3,622 ▪ Europe – Outperformance due to growth in battery systems, other FX $4 eProducts and EGR modules ▪ China – Lower volumes on an existing Organic net sales change* $(186) EV program and declining Founda
Slide 9: Financial Results & Adj. Operating Income
Financial Results & Adj. Operating Income $ in millions ($ in millions, except per Q3 2023 adj. operating share amounts) Three months ended $349 income* Non-GAAP Financial September 30, Information (Continuing 2024 2023 Operations) FX $(0) Net sales $3,449 $3,622 Organic change, productivity, Adj. o
Slide 10: 2024 Outlook and Other Items
2024 Outlook and Other Items $ in millions, except EPS Full-year Net Sales Outlook ($M) Market & Earnings Outlook Current Prior Guidance 9.6% 2024 Outlook 2023 net sales Adj. Operating Margin* $14,198 Organic growth* 0.5% to 2.5% (1.5)% to 0% FX $(20) Adj. operating margin* 9.6% to 9.8% 9.8% to 10.0
Slide 11: Expected 2024 Free Cash Flow Deployed to Shareholders
Expected 2024 Free Cash Flow Deployed to Shareholders Expected Use of 2024 Free Cash Flow $525M ~$25M ~$100M ~$400M Est. 2024 FCF at Midpoint Share Repurchases Dividends Other 11
Slide 12: Thank You
October 31, 2024 Q3 2024 Earnings Call Presentation THANK YOU
Slide 13: Appendix
APPENDIX BORGWUARNER
Slide 14: 2024 Planning Assumptions
2024 Planning Assumptions ▪ CapEx $800-$850 million ▪ Adjusted tax rate for ongoing operations ~23% 14
Slide 15: 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. 90.5 88.3 to 88.7 Electric Electric ~12% FY’23 FY’24 FY’23 FY’24 FY’23 FY’24 ~13% Actual Est. Actual Est. Actual Est. Hybrid ~20% Hybrid ~24% 29.0 to 29.2 28.8 Comb
Slide 16: 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 15.4 to 15.6 18.0 17.0 to 17.1 28.8 29.0 to 29.2 90.5 88.3 to 88.7 Commercial Vehicle 0.7 ~0.6
Slide 17: Quarterly & Full-Year 2023 Recast Segment Information
Quarterly & Full-Year 2023 Recast Segment Information Effective July 1, 2024, the Company implemented a new business unit and management structure designed to further enhance the execution of the Company’s Charging Forward strategy. The Company now reports its results in the following four reportabl
Slide 18: Quarterly & Full-Year 2024 Recast Segment Information
Quarterly & Full-Year 2024 Recast Segment Information Effective July 1, 2024, the Company implemented a new business unit and management structure designed to further enhance the execution of the Company’s Charging Forward strategy. The Company now reports its results in the following four reportabl
Slide 19: Third Quarter & YTD Reconciliation to US GAAP
Third Quarter & YTD 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,
Slide 20: Third Quarter & YTD Reconciliation to US GAAP
Third Quarter & YTD 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, disconti
Slide 21: Third Quarter & YTD Organic Net Sales Change
Third Quarter & YTD 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 Elect
Slide 22: Full Year 2024 Adj. Operating Income and Margin Guidance Reconciliation
Full Year 2024 Adj. Operating Income and Adj. Operating Margin Guidance Reconciliation to US GAAP 22
Slide 23: Full Year 2024 Adj. EPS Guidance Reconciliation to US GAAP
Full Year 2024 Adj. Earnings per Diluted Share Guidance Reconciliation to US GAAP 23
Slide 24: Full Year 2024 Estimated Organic Net Sales Change Guidance and Outgrowth Reconciliation
Full Year 2024 Estimated Organic Net Sales Change Guidance and Outgrowth 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 busin
Slide 25: Free Cash Flow Reconciliations to US GAAP
Q3 & YTD 2024, Q3 & YTD 2023 & Full Year 2024 Free Cash Flow Reconciliations 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 Comp
Slide 26: 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