Slide 1: Q4 2023 Earnings
Q4 2023 EARNINGS February 21, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical fact that provide current expectations or forecasts of future events based on c
Slide 3: Our Strategic Pillars For Long-term Value Creation
VisionPILLARS OUR STRATEGIC For Long-term Value Creation Product Stable Growth Financially Total Shareholder Leadership Strategy Disciplined Returns Technology expert and Pursue attractive Sustainable, high-quality Disciplined investment partner of choice for growth opportunities margin and cash flo
Slide 4: Fourth Quarter 2023 Highlights
Fourth Quarter 2023 Highlights Rapid progress $ 858M $ 127M 14.8% 12.6% On exiting TSAs and establishing Adjusted Sales Adjusted EBITDA Adjusted EBITDA Total segment adjusted margin operating margin independent standalone services Strong Balance sheet Ended quarter with $ 0.71 $ 55M $ 26M Adjusted d
Slide 5: Business Wins
Business Wins PHINIA is winning new business and retaining existing business across LV and CV / Industrial markets and all regions. Notable wins in Q4 include: Conquest Business Retention / Extension Retention / Expansion To Supply To Supply To Supply GDi fuel system to a Next generation heavy Mediu
Slide 6: Accomplishments/Next Steps
Accomplishments/Next Steps 2023 Accomplishments What to Look for in 2024 • Completed Spin-Off and NYSE Listing • Exit nearly all low/no margin CMAs by Q2 • Full year Adj. EBITDA $490M, and Adj. EBITDA Margin 14.2% • Exit of all TSAs by Q3 • Strong Segment Adj. Operating Margin of 11.9% • Launch of k
Slide 7: Diverse Markets And Customers
Diverse Markets And Customers Diverse, Resilient End Markets Exposure – Embedded Relationship Globally Diverse Footprint Majority CV & OES / IAM* with Global OEMs PACCAR HYUNDAI VOLVO TRUCKS 17% 25% APAC CV & Other CATERPILLAR VOLKSWAGEN 42% 44% OE Americas LV OE DAIMLER TRUCKS 41% OES / IAM FORD DF
Slide 8: Strategic Focus On CV And AFM
Strategic Focus On CV And AFM $3.5B of Net Sales 2023 2030 Net Sales Target - $5.0B(1) CV/Other – OE LV – OE CV/Other – OE LV – OE 25% <30% 44% >35% 56% >70% CV & AFM CV & AFM 31% >35% Aftermarket Aftermarket (1) Assumes both Organic and Inorganic growth *CV is Commercial Vehicle; OE is Original Equ
Slide 9: Disciplined Capital Allocation
Disciplined Capital Allocation Expect >$200M Adjusted Free Cash Flow(1) per Year Average Through End of Decade Investment for Competitive Capital Strong Foundation - Growth Return (2) Balance Sheet • Disciplined, ROIC-focused reinvestment • Expect to maintain competitive dividend • Strong balance sh
Slide 10: Expected Consistent Performance Through The Decade
Expected Consistent Performance Through The Decade Appropriate Strong Margins Leverage 2-4% 14-15% >90% ~1x (1) Average Organic Adj. EBITDA Adj. Cash Flow Net Leverage Revenue CAGR Margin(2) Conversion(3) Global Scale Highly Cash with Growth Generative (1) Does not include Contract Manufacturing Rev
Slide 11: Fourth Quarter Financial Performance
Fourth Quarter Financial Performance Adjusted Sales (1) ($M) Commentary $851 $858 YoY Adjusted Sales Growth $324 $326 Aftermarket performance primarily driven by noncontractual commercial negotiations, as well as foreign currencies $527 $532 Fuel Systems growth driven by noncontractual commercial ne
Slide 12: Q4 2023 Adjusted Sales
Q4 2023 Adjusted Sales (1) $851 $(20) $12 $15 $858 $M Strengthening of Driven by GBP and EUR Commodity pass- reduction in partially offset by through China CV sales weakening of CNY Q4 2022 Volume, Mix and Net New Pricing and Inflation Pass-Through FX Q4 2023 Business (1) Non-GAAP metric. See Append
Slide 13: Q4 2023 Adjusted EBITDA
(1) Q4 2023 Adjusted EBITDA $128 $(3) $5 $(3) $127 $M ($19) of inflationary Driven by costs; offset by reduction in $12 of customer Adj. China CV sales pricing; $12 of EBITDA 15.0% 14.8% supplier savings Margin (1) Q4 2022 Volume, Mix and Net New Inflationary & Supply Cost, Net Corporate Costs and A
Slide 14: Full Year 2023 Adjusted Sales
Full Year 2023 Adjusted Sales (1) $3,348 $56 $64 $(18) $3,450 $M Growth in North America GDi Pass-through on and Europe Primarily commodity and Aftermarket; weakening inflationary partially offset by of CNY pricing reduction in CV China 2022 Volume, Mix and Net New Pricing and Inflation Pass-Through
Slide 15: Full Year 2023 Adjusted EBITDA
(1) Full Year 2023 Adjusted EBITDA $506 $6 $6 $(28) $490 $M Growth in North ($88) of Reduction of America GDi and inflationary R&D services Europe costs; offset by to former Aftermarket; $64 of customer parent, increase Adj. partially offset by pricing; $30 of in SG&A and EBITDA reduction in CV supp
Slide 16: 2024 Industry Volume Assumptions
2024 Industry Volume Assumptions North America Europe Asia Pacific LV flat year-over-year LV down low single digits % LV flat to down low single digits % CV down mid-single digits % CV down high single digits % CV up low single digits % CV demand down due to softer Continuing impact of high interest
Slide 17: Full Year 2024 Outlook
Full Year 2024 Outlook Metric FY 2024 Outlook* FY 2023 Adj. Sales(1) $3,400 – $3,550M $3,450M Adj. EBITDA(1)(2) $470 – $510M $490M Adj. EBITDA Margin(1)(2) 13.8 – 14.4% 14.2% Adj. Free Cash Flow(1)(3) $160 – $200M $161M Adj. Tax Rate(4) 28 – 32% 37% (1) Non-GAAP metric. See Appendix pgs. 20-23 for d
Slide 18: Appendix
—PHINIA APPENDIX
Slide 19: Historical Quarterly Financial Metrics
Historical Quarterly Financial Metrics (1) 2022 2023 Actual Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Fuel Systems $538 $473 $534 $527 $2,072 $509 $551 $535 $532 $2,127 Aftermarket 304 323 325 324 1,276 326 336 335 326 1,323 Adjusted Sales(1) $842 $796 $859 $851 $3,348 $835 $887 $870 $858 $3,450 Fuel Systems 66
Slide 20: Adjusted EBITDA and Margin Reconciliation to US GAAP
Adjusted EBITDA and Margin Reconciliation to US GAAP The Company defines adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) as net earnings less interest, taxes, depreciation and amortization, adjusted to exclude the impact of restructuring expense, separation and trans
Slide 21: Adjusted Operating Income and Margin Reconciliation to US GAAP
Adjusted Operating Income and Margin Reconciliation to US GAAP The Company defines adjusted operating income as operating income adjusted to exclude the impact of restructuring expense, separation and transaction expense, intangible asset amortization expense, impairment charges, other net expenses,
Slide 22: Adjusted Sales and Adjusted Free Cash Flow Reconciliation to US GAAP
Adjusted Sales Reconciliation to US GAAP The Company defines adjusted sales as net sales adjusted to exclude certain agreements with BorgWarner that were entered into in connection with the spin-off. Three Months Ended December 31, Fuel Systems Aftermarket Total $ in millions 2023 2022 2023 2022 202
Slide 23: Adjusted Net Earnings per Diluted Share Reconciliation to US GAAP
Adjusted Net Earnings per Diluted Share Reconciliation to US GAAP The Company defines adjusted net earnings per diluted share as net earnings per share adjusted to exclude the tax-effected impact of restructuring expense, separation and transaction expense, intangible asset amortization, impairment