Garrett Motion Inc. · NASDAQ:GTX
Garrett Motion — Q2 2023 Earnings Presentation
25 slides from Garrett Motion's earnings presentation, Jul 27, 2023
Slide 1: Q2 2023 Financial Results
July 27, 2023 Q2 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: Q2 2023 Highlights
Q2 2023 Highlights Strong Q2 2023 Performance Improving Macro Environment Completed Capital Transformation • Net Sales of $1,011M; +18% vs. Q2 • Robust outlook for global light vehicle • Executed the first step in our capital 2022; +19% at Constant Currency1 production, engine boosting and transform
Slide 4: Differentiated Technology Drives Future Success
Differentiated Technology Drives Future Success Continuous Success in our Core Turbo Business Gaining Momentum with Our Zero Emission Offerings • Awarded 2 high volume E-Compressor applications for • Awarded 2nd OEM pre-development project for high speed / hybrid powertrains in Europe high power den
Slide 5: Key financial metrics: Q1 2021 – Q2 2023
Key financial metrics: Q1 2021 – Q2 2023 Reported Net Sales ($M) Adjusted EBITDA1 ($M) Europe North Asia Others America 17.7% 18.0% 16.0% 15.0% 16.2% 16.1% 15.4% 15.6% 17.3% 16.8% $997 $970 $1,011 $935 $901 $945 $898 $839 $862 $859 53% 45% 51% 49% 52% 45% 50% 46% 47% 51% $176 $168 $168 $170 14% 16%
Slide 6: Net Sales bridge: Q2 2022 – Q2 2023
Net Sales bridge: Q2 2022 – Q2 2023 ($M) 6 (1) $1,011 (7) 15 21 118 $859 Q2 2022 Gasoline Diesel Commercial Aftermarket Other FX Q2 2023 Net Sales Vehicles Net Sales % change1 34% 9% 10% 6% 0% 19% Percentage of Reported Net Sales 45% 26% 17% 11% 1% • Net sales up $152M or +18% on a reported basis, +
Slide 7: Adjusted EBITDA bridge: Q2 2022 – Q2 2023
Adjusted EBITDA1 bridge: Q2 2022 – Q2 2023 ($M) (16) $170 (27) 28 4 (7) 4 46 $138 €/$ 1.09 in 2023 +$9M operating performance improvement year-over-year vs. 1.06 in 2022 16.8% 16.1% Q2 2022 Volume Product Mix Inflation Commodity, Productivity, R&D FX Q2 2023 Adjusted Passthrough Transportation SG&A
Slide 8: Adjusted EBITDA to Adjusted Free Cash Flow bridge
Adjusted EBITDA 1 to Adjusted Free Cash Flow 1 bridge ($M) (8) 32 • Working Capital source of cash on higher (25) payables partially offset by inventory driven (14) revenue growth (15) • Capital expenditures and cash taxes in line with expectations • Increased cash interest from issuance of $170 $70
Slide 9: Liquidity and Capital Structure
Liquidity and Capital Structure Share Count (M) Liquidity and Net Debt ($M) 310 Q1 2023 Q2 2023 70 266 264 26 2 Unrestricted Cash1 291 478 245 Undrawn Revolver Credit Facility 475 570 Series A Common Common Total Liquidity 766 1,048 Shares Shares Term Loan B (2021-2028) 1,193 1,191 65 Common Term Lo
Slide 10: Raised 2023 Outlook
Raised 2023 Outlook Updated Outlook (July 27th) Prior Outlook (April 17th) Net Sales $3.84B to $4.03B $3.79B to $3.98B Net Sales Growth +6% to +11% +5% to +10% at Constant Currency1 Net Income $255M to $290M $231M to $268M Adjusted EBITDA1 $620M to $670M $585M to $635M Net Cash Provided $410M to $51
Slide 11: Adjusted EBITDA bridge: 2023 Outlook
Adjusted EBITDA1 bridge: 2023 Outlook ($M) $645 (44) 27 (10) 23 84 (58) 53 $570 EUR / USD 1.10 +$12M (1.11 in 2H) 16.4% 15.8% Adj EBITDA1 Volume Product Mix Price net of Commodity, Productivity, New FX Adj EBITDA2 2022 inflation transportation SG&A - net Technology 2023 Outlook Passthrough and energ
Slide 12: Q2 2023 summary
Q2 2023 summary ▪ Strong earnings and cash performance delivering the best quarter in two years on all measures ▪ Completed the work towards our new capital structure with conversion of Series A Shares to Common shares with a market cap of about $2B that has ~5x the liquidity and a planned $200M deb
Slide 13: Appendices
Appendices Investors Media Eric Birge Maria Santiago Enchandi +1 (734) 228-9529 +1 (734) 386-6593 Eric.Birge@garrettmotion.com Maria.SantiagoEnchandi@garrettmotion.com
Slide 14: Net Sales bridge: YTD 2022 – YTD 2023
Net Sales bridge: YTD 2022 – YTD 2023 ($M) 14 (1) 41 (54) $1,981 42 EUR / USD 1.08 (1.09 in 2022) 179 $1,760 YTD 2022 Gasoline Diesel Commercial Aftermarket Other FX YTD 2023 Net Sales Vehicles Net Sales % change1 25% 9% 13% 7% (5)% 16% % of Reported Net Sales 43% 27% 18% 11% 1% • Net Sales +13% on
Slide 15: Adjusted EBITDA bridge: YTD 2022 – YTD 2023
Adjusted EBITDA1 bridge: YTD 2022 – YTD 2023 ($M) 51 (42) (10) $338 (23) 16 (2) $284 64 EUR / USD 1.08 +$15M (1.09 in 2022) 17.1% 16.1% YTD 2022 Volume Product Mix Inflation Commodity, Productivity, R&D FX YTD 2023 Adjusted Passthrough Transportation SG&A - net Adjusted EBITDA1 net of pricing and En
Slide 16: Income Statement
Income Statement ($ in millions) Q2 2023 Q2 2022 6M 2023 6M 2022 Net sales $1,011 $859 $1,981 $1,760 Cost of goods sold 809 690 1590 1416 Gross profit 202 169 391 344 Selling, general and administrative 63 54 119 107 expenses Other expense, net 1 0 2 1 Interest expense 30 20 58 43 Loss on extinguish
Slide 17: Balance Sheet Summary
Balance Sheet Summary ($ in millions) Assets June 30, 2023 December 31, 2022 Cash and cash equivalents $478 $246 Restricted cash 1 2 Other 1,263 1,183 Total current assets 1,742 1,431 Property, plant and equipment-net 452 470 Deferred income taxes 230 232 Other 468 504 Total assets $2,892 $2,637 Lia
Slide 18: Summary of Cash Flows
Summary of Cash Flows ($ in millions) Q2 2023 Q2 2022 6M 2023 6M 2022 Net income $71 $85 $152 $173 Net cash provided by operating activities 164 104 256 177 Net cash (used for) investing activities (16) (23) (24) (52) Net cash (used for) financing activities 42 (197) (2) (393) Effect of foreign exch
Slide 19: Reconciliation of Constant Currency Sales % Change
Reconciliation of Constant Currency Sales % Change Garrett Q2 2023 Q2 2022 6M 2023 6M 2022 Reported sales % change 18% (8%) 13% (9%) Less: Foreign currency translation (1%) (8%) (3%) (6%) Constant Currency sales % change 19% 0% 16% (3%) Gasoline Reported sales % change 32% 1% 21% (4%) Less: Foreign
Slide 20: Reconciliation of Cash Flow from Operations to Adjusted Free Cash Flow
Reconciliation of Cash Flow from Operations to Adjusted Free Cash Flow ($ in millions) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Net cash provided by operating activities (GAAP) $32 ($423) ($55) $136 $73 $104 $61 $137 $92 $164 Expenditures for property, plant an
Slide 21: Reconciliation of Net Income to Adjusted EBITDA and Full Year Consolidated EBITDA
Reconciliation of Net Income (Loss) to Adjusted EBITDA and Full Year Consolidated EBITDA 1 YTD Q2 YTD Q2 LTM Q1 LTM Q2 ($ in millions) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 2022 2023 2023 2023 Net income - GAAP ($105) $409 $63 $128 $88 $85 $105 $112 $81 $71
Slide 22: Reconciliation of Long-Term Debt to Net Debt and Related Ratios
Reconciliation of Long-Term Debt to Net Debt and Related Ratios ($ in millions) Q2 2023 Q1 2023 Long-term term debt $1,772 $1,157 Short-term term debt $60 $7 Deferred finance costs $59 $29 Gross Debt $1,891 $1,193 Cash and cash equivalents $478 $291 Net Debt $1,413 $902 Consolidated EBITDA LTM (Non-
Slide 23: Full Year 2023 Outlook Reconciliation of Net Sales Growth
Full Year 2023 Outlook Reconciliation of Net Sales Growth to Net Sales Growth at Constant Currency 2023 Full Year Low 2023 Full Year 2023 Full Year End (Updated High End 2023 Full Year Low High End (Prior Outlook) (Updated Outlook) End (Prior Outlook) Outlook) Net sales (% change) 7% 12% 5% 10% Fore
Slide 24: Full Year 2023 Outlook Reconciliation of Net Income to Adjusted EBITDA
Full Year 2023 Outlook Reconciliation of Net Income to Adjusted EBITDA 2023 Full Year Low 2023 Full Year High End (Updated End (Updated 2023 Full year Low 2023 Full year High ($ in millions) Outlook) Outlook) End (Prior Outlook) End (Prior Outlook) Net income - GAAP $255 $290 $231 $268 Net interest
Slide 25: Full Year 2023 Outlook Reconciliation of Cash Flow to Adjusted Free Cash Flow
Full Year 2023 Outlook Reconciliation of Cash Flow from Operations to Adjusted Free Cash Flow 2023 Full Year Low 2023 Full Year High End (Updated End (Updated 2023 Full Year Low 2023 Full Year High ($ in millions) Outlook) Outlook) End (Prior Outlook) End (Prior Outlook) Net cash provided by operati