Borgwarner Inc. · NYSE:BWA
Borgwarner — Q1 2018 Earnings Presentation
20 slides from Borgwarner's earnings presentation, Apr 26, 2018
Slide 1: Earnings Call Presentation Q1 2018
Earnings Call Presentation Q1 2018 April 26, 2018
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements contained in, or incorporated by reference into this presentation, future filings by us with the Securities and Exchange Commission (“SEC”), and oral statements made by, or with the approval of, our authorized personnel, that relate to our future performance or futur
Slide 3: Reconciliation to US GAAP
Reconciliation to US GAAP Q1 2017 to Q1 2018 Asset Non-US GAAP $ in millions, except per share data Impairment & (Excluding non- US GAAP Loss on Restructuring M&A Other Tax comparable Items, (Reported) Divestiture Expense Expense Sale of Asset Adjustments including M&A) 2018 Q1 Sales $2,784.3 $2,784
Slide 4: Agenda
Agenda James Verrier – President and Chief Executive Officer Macro Outlook and Industry Perspective Q1’18 Recap / 2018 Outlook Recent Product Announcements Ron Hundzinski – Chief Financial Officer Q1 2018 Results 2018 Full Year Guidance / Q2 2018 Guidance Q&A © BorgWarner Inc. 4
Slide 5: Industry Perspective & Company Update
Industry Perspective & Company Update James Verrier, President & Chief Executive Officer April 26, 2018
Slide 6: Macro Outlook & Industry Perspective
Macro Outlook & Industry Perspective Q1 Light Vehicle Industry Volumes Modestly Weaker, Offset By Commercial Vehicle Growth Overall Full-Year Market Outlook Stable Hybrid and Electric Program Awards Have Continued © BorgWarner Inc. 6
Slide 7: Q1'18 Recap and 2018 Outlook
Q1’18 Recap and 2018 Outlook Strong Q1 2018 Results Organic Growth of 6.6% Adjusted EPS of $1.10 vs. $0.99 - $1.03 Guidance Full-year 2018 Outlook 2018 Organic Growth Guidance Maintained EPS Range Increased To $4.30 - $4.40 © BorgWarner Inc. 7
Slide 8: Recent Product Announcements
Recent Product Announcements eGearDrive® Electro-Mechanical Variable Cam 2018 Automotive Transmission On-Demand Timing (VCT) News PACE for the First Automotive Transfer Case Technology Award Works (FAW) Group’s for the Ram 1500 4x4 for the new Hyundai for its S-wind wire forming Besturn B30EV and Ju
Slide 9: Earnings Review & Financial Outlook
Earnings Review & Financial Outlook Ron Hundzinski, Executive Vice President & Chief Financial Officer April 26, 2018
Slide 10: BorgWarner Net Sales
BorgWarner Net Sales Q1 2017 to Q1 2018, $ in millions Organic Sales Growth of 6.6% © BorgWarner Inc. 10
Slide 11: BorgWarner Operating Income
BorgWarner Operating Income* Q1 2017 to Q1 2018, $ in millions 17% incremental margin 12.1% 12.2% Margin Margin * Operating income as shown on this slide is non-US GAAP. See reconciliation to US GAAP © BorgWarner Inc. 11
Slide 12: Engine Segment Net Sales & Adjusted EBIT
Engine Segment Net Sales & Adjusted EBIT Q1 2017 to Q1 2018, $ in millions $140 $0 $7 $74 $1,709 $1,716 $1,569 $1,495 4.9%* Q1 2017 net sales Market growth, price and FX Q1 2018 sales pre-Sevcon Sevcon Q1 2018 net sales net new business $18 $280 $280 $16 $0 $262 $246 22% incremental margin 16.5% 16.
Slide 13: Drivetrain Segment Net Sales & Adjusted EBIT
Drivetrain Segment Net Sales & Adjusted EBIT Q1 2017 to Q1 2018, $ in millions $60 $0 $13 $85 $1,070 $1,083 $1,010 $925 9.2%* Q1 2017 net sales Market growth, price and FX Q1 2018 sales pre-Sevcon Sevcon Q1 2018 net sales net new business $7 $13 $124 $3 $121 $117 $104 15% incremental margin 11.3% 11
Slide 14: 2018 Full Year Guidance
2018 Full Year Guidance © BorgWarner Inc. 14
Slide 15: Organic Sales Growth of 5.0% - 7.0%
Organic Sales Growth of 5.0% - 7.0% $ in millions © BorgWarner Inc. 15
Slide 16: Operating Margins Improve YOY
Operating Margins Improve YOY $ in millions 12.5% - 12.6% 12.4% Margin Margin Other Postretirement Income reclass reduced 2017 and 2018 Operating Income $5M and $10M respectively with no EPS impact. © BorgWarner Inc. 16
Slide 17: 2018 Guidance – Other Items
2018 Guidance – Other Items EPS Guidance $4.30 - $4.40 Free Cash Flow $525 - $575 million CapEx $575 - $625 million Share Repurchases ~$100 million R&D Spending ~4% of sales Tax Rate ~28% $ / Euro Exchange Rate ~$1.22 / $405M © BorgWarner Inc. 17
Slide 18: 2018 Second Quarter Guidance
2018 Second Quarter Guidance © BorgWarner Inc. 18
Slide 19: Q2 2018 Guidance
Q2 2018 Guidance Sales Guidance Range $2.70B - $2.75B Organic Growth 7.0% - 9.0% EPS Range $1.09 - $1.11 Sevcon Impact ($0.02) Tax Rate ~28% $ / Euro FX Rate & Impact $1.23 / $125M © BorgWarner Inc. 19
Slide 20: Thank you!
Thank you! © BorgWarner Inc. 20