Slide 1: Investor Presentation May/June 2020
Investor Presentation May/June 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements This communication may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act that reflect, when made, Delphi Technologies PLC’s (“Delphi Technologies”) or BorgWarner Inc.’s (“BorgWarner”) respective current views with respe
Slide 3: BorgWarner Today
BorgWarner Today ▪ Executing Balanced Propulsion Strategy ▪ Significant Sources of Liquidity to Manage Through Current Environment ▪ Delivering Outgrowth Across , and ▪ Product Leadership Remains the Driver of Our Business © BorgWarner Inc. 3
Slide 4: 2020 BorgWarner LV Production Scenarios
2020 BorgWarner LV Production Scenarios Q1 Q2 Q3 Q4 0% -20% Full Year Production (% change from 2019) -40% North America -27% to -35% Europe -29% to -38% China -18% to -21% -60% Global -25% to -31% -80% Feb-20 Expectations High Scenario Low Scenario © BorgWarner Inc. 4
Slide 5: 2020 Net Sales Outlook
2020 Net Sales Outlook $ in millions Full-Year Net Sales Outlook High-End Full-year Net Sales Outlook Low-End 2019 proforma excl. 2019 proforma excl. Thermostat business $10,138 Thermostat business $10,138 FX $(120) FX $(120) Market $(2,505) Market $(3,165) Outgrowth $487 Outgrowth $397 2020 net sal
Slide 6: Significant Sources of Liquidity
Significant Sources of Liquidity $ millions as of March 31, 2020* ▪ March 31st. $2.4B of liquidity, or 24% of 2019 sales Sources of Liquidity Working Capital ▪ In Q1, increased revolver from $1.2B to $1.5B Accounts Cash $901 Receivable $1,735 ▪ Gross debt-to-EBITDA of 1.2x, which is well below 3.5x
Slide 7: Proactive Steps to Sustain Margin Profile and Competitiveness
Proactive Steps to Sustain Margin Profile and Competitiveness ($ in millions) Restructuring Cost Savings ▪ Restructuring, closure or consolidation of Announced Feb 2020 $135-$145 manufacturing and/or technical centers in all (primarily COGS) $120-$130 major regions Announced Apr 2019 (primarily SG&A
Slide 8: BorgWarner Light Vehicle Net New Business Backlog
BorgWarner Light Vehicle Net New Business Backlog Average Light Vehicle Outgrowth 2021 to 2023 Backlog Weighted to Asia ~3% ~10% ~17% China 50% ▪ Expect 2021-2023 outgrowth in the 500bps range Europe 10% Americas 20% ▪ Increased content on Hybrid and Electric Asia ex. China 20% vehicles >100% of net
Slide 9: Investment in Future Continues
Investment in Future Continues R&D Spending and % Sales CapEx Spending and % Sales 5.0% 5.9% to 5.5% 5.7% 5.2% to 4.2% 4.2% 4.1% 5.5% 6.0% 3.8% 4.7% $440 $560 $546 $430 $408 $413 $400 $501 $481 $343 To $480 2016 2017 2018 2019 2020E 2016 2017 2018 2019 2020E ▪ Restructuring enables continued investm
Slide 10: Journey to Advanced Propulsion and Electrification
Journey to Advanced Propulsion and Electrification Complementing Organic Growth with Acquisitions Launched electric drive Launched 48-volt eBooster® Developed groundbreaking Won contract to supply P2 on- Won first eTurboTM award with Unveiled fully integrated drive module (eDM) electrically driven c
Slide 11: A Propulsion Systems Leader, Well Positioned for the Future
A Propulsion Systems Leader, Well Positioned for the Future BorgWarner’s acquisition of Delphi Technologies will strengthen its propulsion systems leadership ✔ ▪ Reinforces leadership in electrified propulsion systems ✔ ▪ Increases electronics and power electronics scale, technology, talent and adds
Slide 12: Update on Delphi Technologies Acquisition
Update on Delphi Technologies Acquisition Resolution of Asserted Breach Integration Work Continues ▪ On 5/6, companies resolved the dispute over ▪ Integration teams continue to work diligently BorgWarner’s assertion that Delphi materially toward transaction closing breached the debt covenant ▪ Ongoi
Slide 13: Delphi Technologies Overview
Delphi Technologies Overview Sales Mix by Business Deep expertise in Expect Powertrain to (1) Electrification with remain a highly profitable Electronics business providing a wide Aftermarket differentiated power 19% 18% electronics and software range of engine and fuel capabilities handling compone
Slide 14: Delphi Technologies Electronics Overview
Delphi Technologies Electronics Overview 18% 2019 Power Electronics ECUs ▪ ~25% of electronics business ▪ Broad range of ECUs and systems & from power electronics software integration capabilities HV Inverters Engine Controller ▪ Broad high voltage power ▪ High level of vertical integration electron
Slide 15: Delphi Technologies Business Overview (Cont'd)
Delphi Technologies Business Overview (Cont’d) 19% 2019 2019 Powertrain Products Aftermarket 26% ▪ Wide range of engine and fuel ▪ Broad product portfolio spanning handing components to help across passenger and commercial monitor, control, and optimize vehicles, heavy commercial vehicles, powertrai
Slide 16: Delphi Technologies Business Overview (Cont'd)
Delphi Technologies Business Overview (Cont’d) 2019 2019 Light Vehicle Fuel Injection 23% Commercial Vehicle Diesel Injection ▪ GDi growth driven by advanced ▪ Strong profitability and cash generation 14% emission standards and decline of enabled by low cost global light vehicle diesel in Europe man
Slide 17: Strengthens Scale and Expertise in Electrification
Strengthens Scale and Expertise in Electrification Mechanical, clutching, Award-winning motors Leadership in power and hydraulic controls provide industry electronics, software, expertise leading technology and controls eGearDrive® Electric Drive High Voltage Integrated Drive Module Transmission Mot
Slide 18: Strengthens Combustion Leadership
Strengthens Combustion Leadership so so Boosting Exhaust Gas Fuel Assembly / Engine / Transmission Technologies Management Delivery Controllers Air Path, Mechanical, and All Fuel Injection and Wheel Drive Electronics Representative Examples © BorgWarner Inc. 18
Slide 19: Enhances Market Balance
Enhances Market Balance End Market Mix (2019 Sales) Geographic Mix (2019 Sales) RoW Aftermarket Asia Pacific 2% 9% 27% 39% Europe Commerical 16% Vehicle OEM Light 75% Vehicle OEM 32% North America Enhanced end market exposure to commercial vehicle and aftermarket while maintaining geographic mix © B
Slide 20: Potential Revenue Synergies Support Long-term Outgrowth Opportunities
Potential Revenue Synergies Support Long-term Outgrowth Opportunities Focused Pursuit Opportunities Light Vehicle Customers Products BEV iDM >$1.3B Customer A P4 iDM HV P2 ▪ Represents top 15 Customer B Motor + Inverter opportunities identified jointly HV P4 during due diligence Customer C BEV iDM P
Slide 21: Appendix
Appendix x BorgWarner
Slide 22: Evolution of Combustion, Hybrid, and Electric ("C-H-E") Mix
Evolution of Combustion, Hybrid, and Electric (“C-H-E”) Mix 2023 Light Vehicle Market (Units) 2023 Light Vehicle Net Sales Mix 8% 6% 12% 8% 25% 30% 29% 29% Electric Hybrid Combustion 67% 64% 63% 59% 1 1 2 3 IHS BWA DLPH Pro Forma BWA Consistent with BorgWarner’s stated C-H-E propulsion strategy Sour
Slide 23: Combined Capabilities Across Propulsion Types
Combined Capabilities Across Propulsion Types Boosting All Wheel Drive & Engine Timing Technologies Cross Axle Systems Systems High Voltage Battery eGearDrive® Battery Module eBooster® electrically P2 Hybrid Modules Integrated Belt / Coolant Heater Transmission driven compressor On / Off Axis Altern
Slide 24: Penetration Rates Continue to Grow
Penetration Rates Continue to Grow Technology Penetration* % - Combustion Only Turbochargers Exhaust Gas Recirculation Variable Cam Timing GDi** *Technology penetration: IHS (Mar 2020) **Delphi Technologies product © BorgWarner Inc. 24
Slide 25: Penetration Rates Continue to Grow
Penetration Rates Continue to Grow Technology Penetration* % Turbochargers Dual Clutch Modules Variable Cam Timing GDi** *Technology penetration: IHS (Mar 2020) **Delphi Technologies product © BorgWarner Inc. 25
Slide 26: No Offer or Solicitation / Participants in the Solicitation
No Offer or Solicitation This communication is being made in respect of the proposed acquisition (the “proposed transaction”) of Delphi Technologies by BorgWarner Inc. This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or b
Slide 27: Additional Information and Where to Find It
Additional Information and Where to Find It This communication may be deemed solicitation material in respect of the proposed transaction. In connection with the proposed transaction, Delphi Technologies filed with the SEC the preliminary proxy statement, and Delphi Technologies will file with the S