Garrett Motion Inc. · NASDAQ:GTX
Garrett Motion — Investor Presentation (March 2020)
28 slides from Garrett Motion's investor presentation, March 2020
Slide 1: Garrett Motion (NYSE: GTX) Investor Presentation
MARCH 2020 GARRETT MOTION (NYSE: GTX) INVESTOR PRESENTATION
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 , as amended. All statements, other than statements of fact, that address activities, events or developments that we or our management intend, e
Slide 3: Additional Disclaimers
Additional Disclaimers Prior to Garrett’s spin-off from Honeywell on October 1, 2018, Garrett’s historical financial statements were prepared on a stan d–alone basis and derived from the consolidated financial statements and accounting records of Honeywell. Accordingly, for periods prior to October
Slide 4: Garrett at a Glance
Garrett at a Glance Garrett Motion is a cutting-edge technology provider enabling vehicles to become safer, more connected, efficient and environmentally friendly $3,248 million 8,500+ 13 2019 Net Sales Employees worldwide State-of-the-art manufacturing plants $583 million 1,200+ 5 2019 Adjusted EBI
Slide 5: Garrett Core Differentiators
Garrett Core Differentiators Technology leadership and broad portfolio of products with breakthrough capabilities Differentiated Technology Turbochargers Electric boosting Automotive software Pipeline of electric products Best-in-class global manufacturing footprint with operational excellence and a
Slide 6: Flexible and Resilient Business Model
Flexible and Resilient Business Model ~80% ▪ High variable costs support the Variable cost structure business through the cycle ~20x ▪ High turnover ratio provides Annual working capital turnover significant operating efficiencies ~75% ▪ Well-invested capacity base to Capacity in high-growth regions
Slide 7: Modern Powertrain Trends
Modern Powertrain Trends Requiring New Powertrain Strategies Enabled by GTX Innovations Greater fuel economy High efficiency wastegate turbo Engine downsizing Environmental Current & growing Regulations High temperature VNT turbo Lower emission requirements Complex 2-stage systems New combustion str
Slide 8: Turbocharger Growth & Garrett Outperformance
Turbocharger Growth & Garrett Outperformance Annual Auto Production (units in millions) 2019 GTX Industry Outperformance (YoY % growth) 110 Garrett LV 12 Light Vehicle Net Sales 100 Production Growth 10 90 8 80 6 Garrett Total 70 Net Sales 4 Growth 60 57% Turbo 2 50 Production 44% 0 40 Hybrid Vehicl
Slide 9: Execution of Technology Growth Strategy
Execution of Technology Growth Strategy Continuous differentiated innovation • Global macros remain strong, leading to higher overall turbo penetration gains CORE TURBO • Strong customer win rate for gasoline VNT programs • New product launches for 2020 remain on schedule Next-generation of technolo
Slide 10: Core Turbo Technologies
Core Turbo Technologies Technology Trend Industry Driver GTX Technology st • 1 Gas VNT industry launch 2016 Light Industry transition CO2 fleet average targets • ~60% EU (~40% global) Gas VNT by Vehicle 2025 Gasoline to VNT • + 30% to 50% $/vehicle Light More complex solutions • Gen7 VNT & Gen4 2Sta
Slide 11: Garrett's Leadership Role in a Transforming Auto Industry
Garrett’s Leadership Role in a Transforming Auto Industry Industry Challenge GTX Offerings In • Hybrid powertrain CO2 optimization • Gas VNT & Electric Boosting production SOP 2021 Gen 2 Electrified • Fuel Cell powertrain affordability • Fuel cell Compressor Gen2 & 3 SOP 2021 • Efficient & light wei
Slide 12: E-Turbo Highlights Garrett's Unique Capabilities
E-Turbo Highlights Garrett’s Unique Capabilities Key Attributes Garrett Benefits • 250kRPM Ultra high speed motor – 20x • Strong turbo hybrid macros driving E- faster than Electric Vehicle (EV) traction Boosting motor • First mass market E-Turbo to launch in 2021 • Proprietary software enables rapid
Slide 13: Key Financial Metrics
Key Financial Metrics Net Sales ($M) Adjusted EBITDA1 ($M) Adjusted FCF1,2 ($M) Adjusted EPS1 ($) Flat at 109% Down Constant Adjusted FCF Down 28% 6% Currency1 Conversion1,3 18.4% 17.9% $466 Indemnity and MTT $188 related $318 payments $3,375 $3,248 $620 $5.36 $583 $178 $3.86 Free Cash $278 Flow $14
Slide 14: Net Sales by Region and Product Line
Net Sales by Region and Product Line 2019 Net Sales by Region1 2019 Net Sales by Product Line Gas products increased to Commercial Vehicles and 39% of net sales in Q4 2019 vs. Aftermarket products total 1% Flat to 2018 Flat to 2018 31% for Diesel nearly 1/3 of net sales 15% 28% FY 2018 41% 25% 20% 1
Slide 15: Liquidity and Capital Resources
Liquidity and Capital Resources Maturity Profile ($M) Available Liquidity ($M) 800 Dec. 31, Sep. 30, Dec. 31, 700 EUR TLA 2018 2019 2019 600 USD TLB Secured debt (1,227) (1,128) (1,047) 500 EUR TLB Revolving credit facility -- -- -- 400 EUR Snr Notes Overdraft on bank accounts (a) -- -- (3) 300 Unse
Slide 16: 2020 Priorities
2020 Priorities ▪ Continue to significantly outperform global auto production ▪ Finalize industrialization of E-Turbo and cybersecurity system for 2021 SOP ▪ Accelerate fuel cell compressor developments: Gen1 production and Gen2 awards ▪ Leverage flexible and resilient business model ▪ Maximize free
Slide 17: Appendix
Appendix ADVANCING MOTION
Slide 18: 2020 Coronavirus Impact
2020 Coronavirus Impact Business Impacts (as of Feb. 27, 2020) Anticipated Financial Impacts for 2020 Mitigating Actions • China plant closings • Q1: Estimated impact of ~$40 • Take advantage of highly variable o Shanghai factory restarted on million in Adjusted EBITDA cost structure of ~80% Februar
Slide 19: 2020 Guidance
2020 Guidance Current 2020 Outlook1 (includes expected effects of novel coronavirus) Estimated Impact from Novel Coronavirus • (4%) to (1%) at constant currency Net Sales • (6%) to (7%) at constant currency Outperforming LV auto production by 3-4% Adjusted EBITDA • $440 million to $480 million • ($8
Slide 20: Reconciliation of Net Income to Adjusted EBITDA and Consolidated EBITDA
Reconciliation of Net Income to Adjusted EBITDA and Consolidated EBITDA ($ in millions) Q4'2019 Q4'2018 2019 2018 Net income (loss) - GAAP 136 69 313 1,206 Removal of unrealized gains & 1 losses related to undesignated FX Tax expense (46) 34 33 (810) hedges Profit before taxes 90 103 346 396 Inclusi
Slide 21: Reconciliation of Constant Currency Sales % Change
Reconciliation of Constant Currency Sales % Change Q4 2019 Q4 2018 Garrett Full Year 2019 Full Year 2018 4% (1%) Reported sales % change (4%) 9% (2%) (3%) Less: Foreign currency translation (4%) 3% 6% 2% Constant currency sales % change 0% 6% Gasoline 48% 9% Reported sales % change 27% 26% (4%) (3%)
Slide 22: Reconciliation of Net Debt, Consolidated Debt and Related Ratios
Reconciliation of Net Debt, Consolidated Debt and Related Ratios December 31, September 30, December 31, ($ in millions) 2018 2019 2019 Secured debt $1,227 $1,128 $1,047 Revolving cash facility 0 0 0 Unsecured debt 401 383 393 Overdraft on bank accounts 0 0 3 Net debt related to hedge obligations (1
Slide 23: Reconciliation of Long-Term Debt to Net Debt
Reconciliation of Long-Term Debt to Net Debt December 31, September 30, December 31, ($ in millions) 2018 2019 2019 Long-term debt $1,569 $1,477 $1,409 Short-term debt 23 4 4 Deferred finance costs 36 30 27 Overdraft on bank accounts 0 0 3 Total debt $1,628 $1,511 $1,443 Cash and cash equivalents (1
Slide 24: Reconciliation of Net Income to Adjusted Free Cash Flow and Free Cash Flow
Reconciliation of Net Income to Adjusted Free Cash Flow and Free Cash Flow Q4 2019 Q4 2018 ($ in millions) Full Year 2019 Full Year 2018 $136 $69 Net income - GAAP $313 $1,206 ($46) $34 Tax expense $33 ($810) $90 $103 Profit before taxes $346 $396 $15 $16 Net interest (income) expense $61 $12 $18 $1
Slide 25: Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS
Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS Q4 2019 Q4 2018 ($ in millions) Full Year 2019 Full Year 2018 $136 $69 Net income - GAAP $313 $1,206 ($60) $0 Special Tax matters1 ($60) ($879) $76 $69 Net income adjusted for special tax matters (Non-GAAP) $253 $327 ($14) ($16) Ad
Slide 26: Reconciliation of Net Income to Adjusted FCF Conversion
Reconciliation of Net Income to Adjusted FCF Conversion Q4 2019 Q4 2018 ($ in millions) Full Year 2019 Full Year 2018 $136 $69 Net income - GAAP $313 $1,206 ($60) $0 Special Tax matters1 ($60) ($879) $76 $69 Net income adjusted for special tax matters (Non-GAAP) $253 $327 ($14) ($16) Add back HON I/
Slide 27: Reconciliation of Cash Flow from Operations less Expenditures for PP&E to Adjusted Free Cash Flow
Reconciliation of Cash Flow from Operations less Expenditures for PP&E to Adjusted Free Cash Flow Q4 2019 Q4 2018 ($ in millions) Full Year 2019 Full Year 2018 $117 $133 Net cash from operating activities $242 $373 (28) (29) Expenditures for property plant and equipment (102) (95) Cash flow from ope
Slide 28: Copyrights © 2020 Garrett Motion Inc.
Copyrights © 2020 Garrett Motion Inc.