Garrett Motion Inc. · NASDAQ:GTX
Garrett Motion — Q3 2023 Earnings Presentation
24 slides from Garrett Motion's earnings presentation, Oct 24, 2023
Slide 1: Q3 2023 Financial Results
October 24, 2023 Q3 2023 FINANCIAL RESULTS
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 19 95. All statements, other than statements of fact, that address activities, events or developments that we or our management intend, expect, pro
Slide 3: Q3 2023 Highlights
Q3 2023 Highlights Solid Q3 2023 Performance Evolving Macro Environment Capital Allocation Execution • Net Sales of $960M; +2% vs. Q3 • Euro to USD exchange rate • Repurchased $161M of common 2022; -1% at constant currency1 weakening sequentially stock in Q3 as part of $250M • Positive product ramp-
Slide 4: Differentiated Technology Drives Future Success
Differentiated Technology Drives Future Success Continuous Success in Our Gaining Momentum with Our Turbo Business Zero Emission Offerings • Increasing Industrial and Off-Highway product ranges by • In Q3, awarded 2 more OEM pre-development projects introducing the GT80, our largest turbo yet for hi
Slide 5: Key financial metrics: Q1 2022 – Q3 2023
Key financial metrics: Q1 2022 – Q3 2023 Reported Net Sales ($M) Adjusted EBITDA1 ($M) Europe North Asia Others America $1’011 16.2% 16.1% 15.4% 15.6% 17.3% 16.8% 15.8% $945 $970 $960 $901 $859 $898 45% 51% 49% 45% 50% 46% 51% $168 $170 20% 19% 21% $146 $138 $146 $140 $152 17% 20% 18% 20% 31% 27% 33
Slide 6: Net Sales bridge: Q3 2022 – Q3 2023
Net Sales bridge: Q3 2022 – Q3 2023 ($M) (21) 37 $960 $945 (24) 21 0 2 Q3 2022 Gasoline Diesel Commercial Aftermarket Other FX Q3 2023 Net Sales Vehicles Net Sales % change1 9% (9)% (14)% 0% (1)% Percentage of Reported Net Sales 46% 24% 16% 12% 2% • Net Sales up $15M or +2% on a reported basis, (1)%
Slide 7: Adjusted EBITDA bridge: Q3 2022 – Q3 2023
Adjusted EBITDA1 bridge: Q3 2022 – Q3 2023 ($M) $152 $146 5 (2) 8 (23) 23 (5) 0 €/$ 1.09 in 2023 +$16M operating performance improvement year-over-year vs. 1.01 in 2022 15.4% 15.8% Q3 2022 Volume Product Mix Pricing net Commodity, Productivity, R&D FX Q3 2023 Adjusted of Inflation Transportation SG&
Slide 8: Adjusted EBITDA to Adjusted Free Cash Flow bridge
Adjusted EBITDA 1 to Adjusted Free Cash Flow 1 bridge ($M) (41) • Working Capital use of cash driven impact of timing in line with full year expectations (11) • Capital expenditures and cash taxes in line (24) with expectations $152 (21) 2 • Increased cash interest from issuance of $700M Term Loan B
Slide 9: Liquidity and capital structure
Liquidity and capital structure Common Shares (M) and Market Capitalization ($M) Liquidity and Net Debt ($M) M Common 264 Q2 2023 Q3 2023 Shares 21 Unrestricted Cash1 478 162 243 Undrawn Revolver Credit Facility 570 570 $161M Total Liquidity 1,048 732 Share buy back Term Loan B2 (2021-2028) 1,191 1,
Slide 10: Revised 2023 outlook for foreign exchange
Revised 2023 outlook for foreign exchange Updated Outlook (October 24th) Prior Outlook (July 27th) Net Sales $3.83B to $3.90B $3.84B to $4.03B Net Sales Growth +7% to +9% +6% to +11% at Constant Currency1 Net Income $252M to $272M $255M to $290M Adjusted EBITDA1 $615M to $645M $620M to $670M Net Cas
Slide 11: Q3 2023 summary
Q3 2023 summary ▪ Delivered solid financial performance in the quarter as operational productivity generated $6M of year-over- year Adjusted EBITDA1 expansion and $57M of Adjusted Free Cash Flow1 ▪ Executed planned early debt repayment and share repurchase activities; upgraded by S&P to BB- ▪ Contin
Slide 12: Appendices
Appendices Investors Media Eric Birge Maria Santiago Enchandi +1 (734) 228-9529 +1 (734) 386-6593 Eric.Birge@garrettmotion.com Maria.SantiagoEnchandi@garrettmotion.com
Slide 13: Net Sales bridge: YTD 2022 – YTD 2023
Net Sales bridge: YTD 2022 – YTD 2023 ($M) 14 1 $2,941 17 (32) 21 EUR / USD 1.08 215 (1.06 in 2022) $2,705 YTD 2022 Gasoline Diesel Commercial Aftermarket Other FX YTD 2023 Net Sales Vehicles Net Sales % change1 19% 3% 3% 4% 3% 10% % of Reported Net Sales 44% 26% 17% 12% 1% • Net Sales +9% on a repo
Slide 14: Adjusted EBITDA bridge: YTD 2022 – YTD 2023
Adjusted EBITDA1 bridge: YTD 2022 – YTD 2023 ($M) $490 (46) 46 (42) 39 (12) 6 $430 69 EUR / USD +$31M operating performance improvement year-over-year 1.08 (1.06 in 2022) 16.7% 15.9% YTD 2022 Volume Product Mix Inflation Commodity, Productivity, R&D FX YTD 2023 Adjusted Passthrough Transportation SG
Slide 15: Income Statement
Income Statement ($ in millions) Q3 2023 Q3 2022 9M 2023 9M 2022 Net sales $960 $945 $2,941 $2,705 Cost of goods sold 784 767 2374 2183 Gross profit 176 178 567 522 Selling, general and administrative 59 57 178 164 expenses Other expense, net 1 1 3 2 Interest expense 50 18 108 61 Loss on extinguishm
Slide 16: Balance Sheet Summary
Balance Sheet Summary ($ in millions) Assets September 30, 2023 December 31, 2022 Cash and cash equivalents $162 $246 Restricted cash 1 2 Other 1,227 1,183 Total current assets 1,390 1,431 Property, plant and equipment-net 437 470 Deferred income taxes 225 232 Other 480 504 Total assets $2,532 $2,63
Slide 17: Summary of Cash Flows
Summary of Cash Flows ($ in millions) Q3 2023 Q3 2022 9M 2023 9M 2022 Net income $57 $105 $209 $278 Net cash provided by operating activities 74 61 330 238 Net cash used for investing activities (24) (26) (48) (78) Net cash used for financing activities (364) (43) (366) (436) Effect of foreign excha
Slide 18: Reconciliation of Constant Currency Sales % Change
Reconciliation of Constant Currency Sales % Change Garrett Q3 2023 Q3 2022 9M 2023 9M 2022 Reported sales % change 2% 13% 9% (2%) Less: Foreign currency translation 3% (12%) (1%) (7%) Constant Currency sales % change (1%) 25% 10% 5% Gasoline Reported sales % change 10% 21% 17% 4% Less: Foreign curre
Slide 19: Reconciliation of Cash Flow from Operations to Adjusted Free Cash Flow
Reconciliation of Cash Flow from Operations to Adjusted Free Cash Flow ($ in millions) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Net cash provided by operating activities (GAAP) $73 $104 $61 $137 $92 $164 $74 Expenditures for property, plant and equipment (29) (23) (26) (13) (8) (25) (
Slide 20: Reconciliation of Net Income to Adjusted EBITDA and Full Year Consolidated EBITDA
Reconciliation of Net Income to Adjusted EBITDA and Full Year Consolidated EBITDA 1 YTD Q3 YTD Q3 LTM Q2 LTM Q3 ($ in millions) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 2022 2023 2023 2023 Net income - GAAP $88 $85 $105 $112 $81 $71 $57 $278 $209 $369 $321 Interest expense, net of int
Slide 21: Reconciliation of Long-Term Debt to Net Debt and Related Ratios
Reconciliation of Long-Term Debt to Net Debt and Related Ratios ($ in millions) Q3 2023 Q2 2023 Long-term term debt $1,622 $1,772 Short-term term debt $7 $60 Deferred finance costs $48 $59 Gross Debt $1,677 $1,891 Cash and cash equivalents $162 $478 Net Debt $1,515 $1,413 Consolidated EBITDA LTM (No
Slide 22: Full Year 2023 Outlook Reconciliation of Net Sales Growth
Full Year 2023 Outlook Reconciliation of Net Sales Growth to Net Sales Growth at Constant Currency 2023 Full Year Low 2023 Full Year 2023 Full Year End (Updated High End 2023 Full Year Low High End (Prior Outlook) (Updated Outlook) End (Prior Outlook) Outlook) Net sales (% change) 6% 8% 7% 12% Forei
Slide 23: Full Year 2023 Outlook Reconciliation of Net Income to Adjusted EBITDA
Full Year 2023 Outlook Reconciliation of Net Income to Adjusted EBITDA 2023 Full Year Low 2023 Full Year High End (Updated End (Updated 2023 Full year Low 2023 Full year High ($ in millions) Outlook) Outlook) End (Prior Outlook) End (Prior Outlook) Net income - GAAP $252 $272 $255 $290 Net interest
Slide 24: Full Year 2023 Outlook Reconciliation of Cash Flow to Adjusted Free Cash Flow
Full Year 2023 Outlook Reconciliation of Cash Flow from Operations to Adjusted Free Cash Flow 2023 Full Year Low 2023 Full Year High End (Updated End (Updated 2023 Full Year Low 2023 Full Year High ($ in millions) Outlook) Outlook) End (Prior Outlook) End (Prior Outlook) Net cash provided by operati