Slide 1: Q1 2024 Earnings
Q1 2024 EARNINGS April 25, 2024
Slide 2: Forward-Looking Statements
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: First Quarter 2024 Highlights
First Quarter 2024 Highlights Rapid Progress $ 846M $ 131M 15.5% 13.6% On exiting TSAs and CMAs - Closer to being fully separated Adjusted Sales Adjusted EBITDA Adjusted EBITDA Total segment adjusted margin operating margin Strong Balance Sheet • $325M Cash on-hand • Net leverage of <1x $ 1.08 $ 13M
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 Q1 include: Retention / Extension Retention / Extension Conquest Business To Supply To Supply To Supply Commercial vehicle fuel GDi fuel systems to a GD
Slide 6: 2024 Objectives
2024 Objectives • Exit low/no margin CMAs by Q2 • Exit of all TSAs by Q3 • Launch of key new technologies o H2 Injector for ICE o 500 Bar GDi System o Value-based D-Di derived from GDi technology o First internally designed and developed ECU • Deliver on profitability targets • Generate strong free
Slide 7: Disciplined Capital Allocation
Disciplined Capital Allocation Expect >$200M Adjusted Free Cash Flow(1) per Year Average Through End of Decade Investment for Competitive Capital Strong Foundation - Growth Return (2) Balance Sheet • Disciplined, ROIC-focused reinvestment • Expect to maintain competitive dividend • Strong balance sh
Slide 8: Expected Consistent Performance Through The Decade
Expected Consistent Performance Through The Decade Appropriate Strong Margins Leverage 2-4% 14-15% >90% ~1x (1) Average Organic Adj. EBITDA Adj. Cash Flow Net Leverage Revenue CAGR Margin(2) Conversion(3) Global Scale Highly Cash with Growth Generative (1) Does not include Contract Manufacturing Rev
Slide 9: First Quarter Financial Performance
First Quarter Financial Performance Adjusted Sales (1) ($mm) Commentary $835 $846 YoY Adjusted Sales Growth $326 $336 Aftermarket growth primarily driven by noncontractual commercial negotiations, contractual commodity pass-through as well as foreign $509 $510 currencies Fuel Systems performance dri
Slide 10: Q1 2024 Adjusted Sales
Q1 2024 Adjusted Sales (1) $835 $(7) $12 $6 $846 $M Strengthening of Driven by lower Inflationary pass- GBP and EUR commercial vehicle through and pricing partially offset by sales in Europe weakening of CNY Q1 2023 Volume / Mix Pricing and Inflation Pass-Through FX Q1 2024 (1) Non-GAAP metric. See
Slide 11: Q1 2024 Adjusted EBITDA
(1) Q1 2024 Adjusted EBITDA $14 $(6) $131 $7 $116 $M $12mm of recoveries & price, $(9)mm Increase in Favorable $19mm standalone aftermarket product of supplier savings company costs, and customer mix in & settlement offset partially offset by North America and by $(17)mm of favorable R&D and Europe
Slide 12: 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 Adj. EBITDA Margin(1) 13.8 – 14.4% Adj. Free Cash Flow(1)(2) $160 – $200M Adj. Tax Rate(3) 28 – 32% (1) Non-GAAP metric. See Appendix pgs. 15-18 for definitions and reconciliations to
Slide 13: Appendix
—PHINIA APPENDIX
Slide 14: Historical Quarterly Financial Metrics
Historical Quarterly Financial Metrics (1) 2023 2024 Q1 Q2 Q3 Q4 FY Q1 Fuel Systems $509 $551 $535 $532 $2,127 $510 Aftermarket 326 336 335 326 1,323 336 Adjusted Sales $835 $887 $870 $858 $3,450 $846 Fuel Systems 43 62 55 55 215 55 Margin % 8.4% 11.3% 10.3% 10.3% 10.1% 10.8% Aftermarket 48 49 46 53
Slide 15: 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 16: 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 17: Adjusted Sales 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 millions Q1 Q2 Q3 Q4 FY Q1 Fuel Systems net sales $ 509 $ 551 $ 561 $ 556 $ 2,177 $ 5
Slide 18: Adjusted Net Earnings per Diluted Share Reconciliation
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