Slide 1: Q2 2024 Earnings
Q2 2024 EARNINGS July 30, 2024
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements This presentation This press release 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 futur
Slide 3: Our Vision and Strategic Pillars
VisionOUR For Long-term STRATEGICValue Creation PILLARS 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 flow
Slide 4: Second Quarter 2024 Highlights
Second Quarter 2024 Highlights Rapid Progress $ 863M $ 117M 13.6% 12.2% • No further Transition Services from former parent – fully Adjusted Sales Adjusted EBITDA Adjusted EBITDA Total segment adjusted margin operating margin independent operations • No further material Contract Manufacturing Strong
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 Q2 include: Retention / Extension Conquest Business Conquest Business To Supply To Supply To Supply Gasoline fuel delivery Light vehicle fuel delivery E
Slide 6: Disciplined Capital Allocation
Disciplined Capital Allocation Expect >$200M Adjusted Free Cash Flow(1) per Year Average Through End of Decade Strong Foundation - Competitive Capital Investment for Return (2) Growth Balance Sheet • Strong balance sheet • Expect to maintain competitive dividend • Disciplined, ROIC-focused reinvestm
Slide 7: Expected Consistent Performance Through The Decade
Expected Consistent Performance Through The Decade Appropriate Strong Margins Leverage Target 2-4% 14-15% >90% ~1.5x (1) Average Organic Adj. EBITDA Adj. Cash Flow Net Leverage Revenue CAGR Margin(2) Conversion(3) Global Scale Highly Cash with Growth Generative (1) Does not include Contract Manufact
Slide 8: Second Quarter Financial Performance
Second Quarter Financial Performance Adjusted Sales (1) ($mm) Commentary $887 $863 YoY Adjusted Sales Growth $336 $350 Aftermarket growth primarily driven by European sales volume increases and noncontractual commercial negotiations $551 $513 Fuel Systems performance driven by lower commercial vehic
Slide 9: Q2 2024 Adjusted Sales
Q2 2024 Adjusted Sales (1) $887 $(18) $- $(6) $863 $M Driven by lower commercial vehicle Commodity pass- sales in Europe and through increases in lower light vehicle Aftermarket offset by Weakening of the sales in China, offset non-reoccurrence of CNY, BRL & EUR by European Q2 2023 commodity Afterma
Slide 10: Q2 2024 Adjusted EBITDA
(1) Q2 2024 Adjusted EBITDA $9 $(18) $130 $(4) $117 $M $(11)mm increase in Lower commercial employee costs, vehicle sales in $13mm including $(4)mm Europe and lower of supplier savings & of standalone light vehicle sales in recoveries offset by company costs, China offset by $(4)mm of employee $(2)m
Slide 11: Full Year 2024 Outlook Confirmed
Full Year 2024 Outlook Confirmed Metric FY 2024 Outlook* Adj. Sales(1) $3,400 – $3,550M Adj. EBITDA(1) $470 – $510M Q2 2024 Earnings Deck_Working Draft.pptx Adj. EBITDA Margin(1) 13.8 – 14.4% Adj. Free Cash Flow(1)(2) $160 – $200M Adj. Tax Rate(3) 33 – 37% (1) Non-GAAP metric. See Appendix for defin
Slide 12: Appendix
—PHINIA APPENDIX
Slide 13: Historical Quarterly Financial Metrics
Historical Quarterly Financial Metrics (1) 2023 2024 Q1 Q2 Q3 Q4 FY Q1 Q2 Fuel Systems $ 509 $ 551 $ 535 $ 532 $ 2,127 $ 510 $ 513 Aftermarket 326 336 335 326 1,323 336 350 Adjusted Sales $ 835 $ 887 $ 870 $ 858 $ 3,450 $ 846 $ 863 Fuel Systems 43 62 55 55 215 55 52 Margin % 8.4% 11.3% 10.3% 10.3% 1
Slide 14: 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 15: 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 16: 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. 2023 2024 $ in m illions Q1 Q2 Q3 Q4 FY Q1 Q2 Fuel Systems net sales $ 509 $ 551 $ 561 $ 556 $ 2,177
Slide 17: Adjusted Net Earnings Reconciliation to US GAAP
Adjusted Net Earnings Reconciliation to US GAAP The Company defines adjusted net earnings as net earnings adjusted to exclude the tax-effected impact of restructuring expense, separation and transaction expense, intangible asset amortization, impairment charges, other net expenses, and other gains,
Slide 18: 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