Garrett Motion Inc. · NASDAQ:GTX
Garrett Motion — Debt Investor Presentation (September 2020)
27 slides from Garrett Motion's debt investor presentation, Sep 21, 2020
Slide 1: DIP Lender Presentation
DIP Lender presentation Settlement Communications Protected by F.R.E. 408 and State Law Analogs September 8, 2020 Settlement Communications Protected by F.R.E. 408 and State Law Analogs | CONFIDENTIAL/SUBJECT TO CLEANSE SPECIAL NOTICE REGARDING MATERIAL NON PUBLIC INFORMATION CONTAINED HEREIN THIS L
Slide 2: Lender Presentation Notice and Confidentiality
This Lender Presentation (the "Lender Presentation") has been prepared solely for informational purposes from information supplied by or on behalf of Garrett Motion Inc. (the "Company"), and is being furnished by Citibank, N.A. (the "Arranger") to you in your capacity as a prospective lender (the "R
Slide 3: Information
Information The Recipient acknowledges and agrees that (i) the Arranger received the Evaluation Material from third party sources (including the Company) and it is provided to the Recipient for informational purposes, (ii) the Arranger and its affiliates bear no responsibility (and shall not be liab
Slide 4: Company representation letter to Citibank
Citibank, N.A. Attention: Shane Azzara September 8, 2020 Ladies and Gentlemen: We refer to the proposed $250 million DIP Facility (the "Facility") for Garrett Motion Inc. (the "Company") that you are arranging at our request, and the Lender Presentation and other marketing materials prepared in conn
Slide 5: Presenters & Agenda
Presenters & Agenda Transaction Overview Business & Financial Update Sean Deason Alexander Svoyskiy Shane Azzara Chief Financial Officer Garrett Motion Managing Director Perella Weinberg Partners Managing Director Citi
Slide 6: Transaction Overview
Transaction Overview After a comprehensive review of its strategic alternatives, Garrett Motion, Inc. (“Garrett” or the “Company”) is contemplating a possible sale of the Company pursuant to a pre-arranged chapter 11 plan of reorganization that will substantially reduce leverage Although no decision
Slide 7: Proposed treatment of debt and claims
Amount Outstanding Proposed treatment DIP Financing $250 Fully repaid at emergence Revolver $370(2) Repaid in full at emergence Claim amount to include pre-petition principal and all accrued and unpaid non-default interest through the effective date Term Loan A $297(3) Repaid in full at emergence Cl
Slide 8: Current Transaction Target Timeline
Current Transaction Target Timeline Key Transaction Target Dates Illustrative Timeline Launch DIP syndication: September 8 DIP Commitments Due: September 10 Signing of SAPA: September 12 (“T”) Petitions filed: September 13 (T+1) Motion for approval of bidding protections: September 14 (T+2) Court ap
Slide 9: DIP Financing
TO CLEANSE Garrett ADVANCING MOTION DIP Financing
Slide 10: DIP Transaction Overview
DIP Transaction Overview At Interim Order ($ in millions) Sources NEW DIP Term Loan $100 Total $100 Uses Cash to Balance Sheet $100 Total $100 Pro Forma Capitalization Sources and Uses Transaction Overview At Final Order ($ in millions) Sources DIP Facility $150 Total $150 Uses Cash to Balance Sheet
Slide 11: Terms
Terms Borrower Garrett Motion Inc. Guarantors: All current guarantors under the pre-petition credit facility, including all material non-US subsidiaries, will be debtors and guarantors under the DIP facility, subject to guarantee and security principles for non-US guarantors (as for existing facilit
Slide 12: Preliminary DIP Forecast
Preliminary DIP Forecast Note: Preliminary estimates. Does not include impact of litigation trust funding or exit financing fees
Slide 13: Key DIP Financing Forecast Assumptions
Key DIP Financing Forecast Assumptions Topic Assumption Forecast Company’s base cash forecast adjusted for Ch. 11 costs and assumed operational impacts of the case Consolidated GTX cash flows and liquidity Weekly forecast through Nov. 2020 and monthly through Jan 2021 Petition Date / Case Duration P
Slide 14: Financial Update
Financial Update(1)(2) Notes: (1)Assumes full elimination of the Honeywell obligations and an illustrative pro forma capital structure (2)Quarterly financials for Q3 and Q4 2020 don’t fully match the DIP budget due to timing variances
Slide 15: Strong Growth and Profitability Supported by Turbo Penetration
Revenue by Geography(1) Revenue by Product Line(1) Revenue by Customer(1) Strong Growth and Profitability Supported by Turbo Penetration and Market Outgrowth Notes:(1)Based on 2019A Net Sales (2)Others includes Caterpillar, FPT Industrial, GM, Hino, Weichai Power, and Others Revenue Evolution Revenu
Slide 16: Strong Financial Results Amid Challenging Market Conditions
Adj. EBITDA Adj. EBITDA Margin % Summary Adj. EBITDA and Capital Expenditures Adj. EBITDA (1) Capex (1) Notes:(1)Spin-off date: 01-Oct-2018; 2018 10-K includes GTX specific capex from 2016 – 2018 Strong Financial Results Amid Challenging Market Conditions and Further Improvement Expected
Slide 17: Expecting Return to Pre-Crisis Volumes by 2023
Expecting Return to Pre-Crisis Volumes by 2023, Driven by CHN & NA Regaining Pre-Crisis Volumes ‘23 Regional Market Outlook NA EUR CHN Global production (M units) forecast forecast GTX most conservative than IHS short-term, but aligned 2022+ GTX view by end market, i.e. reflecting inventory changes
Slide 18: Light Vehicles: Global Turbo Penetration and Garrett Volume Assumptions
Industry Engines Turbo Industry LVG Turbo Penetration 38% 44% 45% 47% 48% 49% LVD Turbo Penetration 96% 97% 98% 98% 99% 99% GTX Turbo Volumes Light Vehicles (LV): Global Turbo Penetration and Garrett Volume Assumptions Commentary 2019 light vehicle industry volumes regained by 2024 Continued light v
Slide 19: Commercial Vehicles: Global Turbo Penetration and Garrett Volume Assumptions
Industry Engines Turbo Industry GTX Turbo Volumes Commercial Vehicles (CV): Global Turbo Penetration and Garrett Volume Assumptions Commentary CV industry not expected to regain 2019 volumes over forecast period => potential for recovery to be more V-shaped CV Turbo Penetration 68% 67% 65% 67% 68% 7
Slide 20: Strong Free Cash Flow Generation Expected in 2021 Onwards
Strong Free Cash Flow Generation Expected in 2021 Onwards Adj. EBITDA and % Margin Adj. EBITDA Adj. EBITDA Margin % Free Cash Flow(1) Free Cash Flow Free Cash Flow Profile 6+6 Plan Estimated Chapter 11 CF Impact(2) Source:Company projections, subject to ongoing review Note:(1)Defined as Cash from Op
Slide 21: Summary Financial Statements (Annual)
Summary Financial Statements (Annual) Source:Company projections, subject to ongoing review Note:(1)Total Revenue less Total Material Costs
Slide 22: Summary Financial Statements (Quarterly)
Summary Financial Statements (Quarterly) Source:Company projections, subject to ongoing review Note:(1)Total Revenue less Total Material Costs
Slide 23: Summary Balance Sheet
Summary Balance Sheet Note:(1)For illustrative purposes assumes new pro forma debt of $1.1 billion (1)
Slide 24: Adjusted EBITDA Walk-Down
Adjusted EBITDA Walk-Down Source:Company projections, subject to ongoing review Note:(1)Inclusive of Homer charges
Slide 25: Disclosure
Disclosure This presentation contains forward-looking statements that reflect, when made, the Company's current estimates with respect to current events, certain investments and financial performance. Such forward-looking statements are subject to many risks, uncertainties and factors relating to th
Slide 26: Forward Looking Statements
Forward Looking Statements This presentation contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of fact, that address activities, events or developments that we or our management intend, ex
Slide 27: Garrett Advancing Motion
Garrett ADVANCING MOTION www.garrettmotion.com yin f © | garrettmotion
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