Garrett Motion Inc. · NASDAQ:GTX
Garrett Motion — Investor Day (September 2018)
81 slides from Garrett Motion's investor day presentation, Sep 7, 2018
Slide 1: Garrett Investor Conference
Sept 6, 2018 | GARRETT INVESTOR CONFERENCE – NYSE: GTX New York City
Slide 2: Disclosure
Disclosure ADDITIONAL INFORMATION For additional information with respect to Garrett and the proposed spin-off, please refer to the Form 10 Registration Statement, as it may be further amended, on file with the Securities and Exchange Commission. The spin-off is subject to customary conditions, incl
Slide 3: Investor conference agenda
Investor conference agenda 8:30—8:40 Welcome and Introduction Paul Blalock, VP—IR 8:40—9:30 Executive Overview Olivier Rabiller, CEO 9:30—10:00 Technology Overview Craig Balis, CTO 10:00—10:15 Break 10:15—10:30 Operational Overview Thierry Mabru, SVP—Integrated Supply Chain 10:30—11:15 Financial Ove
Slide 4: Today's presenters
Today’s presenters YEARS IN PREVIOUS NAME SELECTED EXPERIENCE INDUSTRY EXPERIENCE Olivier Rabiller • Named President and CEO of Garrett in July 2016; joined in 2002 23 • Previously served at Renault in Customer Services, CEO Engine Project Management and Purchasing Craig Balis • Named VP and Chief T
Slide 5: Executive Overview
Executive Overview Olivier Rabiller—CEO
Slide 6: Garrett is a cutting-edge technology provider
Garrett is a cutting-edge technology provider that enables vehicles to become safer, more connected, efficient and environmentally friendly. We lead the development of zinnovative and differentiated solutions which empower the transportation industry to redefine and further advance motion.
Slide 7: Garrett at a glance
Garrett at a glance $3.1B ~7,500 ~70% 2017 Revenue Employees Workforce in High Growth Regions $623M ~1,200 1,400+ 2017 Consolidated EBITDA1,2 Engineers Patents issued or pending 7% 5 ~100M Organic Revenue growth R&D centers Garrett turbos in use globally YoY H1 20183 20% 13 40 H1 2018 Consolidated E
Slide 8: Key investment highlights
Key investment highlights 1. Global market leadership with accelerating macro tailwinds 2. Technology leadership and broad portfolio of products with breakthrough capabilities 3. Long-term co-development with global OEMs and a worldwide aftermarket platform 4. Best-in-class global manufacturing foot
Slide 9: A differentiated global leader
1 Global market leadership with accelerating macro tailwinds A differentiated global leader 1 Net revenue Consolidated EBITDA ($mm) ($mm) Impact of $175mm % margin (excl. Honeywell Indemnity Obligation payment) $3,096 Honeywell Indemnity % margin (incl. Honeywell Indemnity Obligation payment) $2,908
Slide 10: Accelerating macro tailwinds fuel strong outlook
1 Global market leadership with accelerating macro tailwinds Accelerating macro tailwinds fuel strong outlook Tougher Global CO2 Regulations Turbo Penetration Outlook mm units production per year (27%) (23%) 110 + 15mm (15%) (23%) New cars by 2025 100 Light Vehicle Production 1-2% CAGR 2017-2025 90
Slide 11: Dynamic Market: Turbo adoption in all regions
1 Global market leadership with accelerating macro tailwinds Dynamic Market: Turbo adoption in all regions Turbocharger Production and Penetration by Region NORTH AMERICA EUROPE INDIA 7.0mm 9.3mm turbos 18.4mm 19.3mm turbos 2.5mm 3.7mm turbos 2022E 2017 2022E 50% 78% 44% +16% (2%) +2% 2017 2022E 201
Slide 12: Well-positioned in attractive channels
1 Global market leadership with accelerating macro tailwinds Dynamic Market: Well-positioned in attractive channels Go-to-market Verticals 1 KEY TAKEAWAYS CHANNEL % OF REVENUE MARKET GROWTH PLATFORM EXAMPLES LIGHT VEHICLE • Market leader with favorable platform mix 48% BMW X5 DIESEL • Well positione
Slide 13: Diesel is a key powertrain technology for larger vehicles
1 Global market leadership with accelerating macro tailwinds Diesel is a key powertrain technology for larger vehicles Diesel dynamic Diesel benefits TURBO DIESEL VEHICLE MARKET % OF GARRETT • Fuel economy improvement by up to MODEL EXAMPLES GROWTH DIESEL REVENUE 20% in larger vehicles • 10-15% less
Slide 14: Technology: A long history of innovation
2 Technology leadership and broad portfolio of products with breakthrough capabilities Technology: A long history of innovation Milestones TODAY 1,400+ Patents Issued or Pending 2000’s 2018:E-Turbo Boost controls 2018: Proof of concepts of production award IVHM with several OEMs SOFTWARE 2018: Virtu
Slide 15: Technology: Strategic roadmap
2 Technology leadership and broad portfolio of products with breakthrough capabilities Technology: Strategic roadmap Continuous differentiated innovation • 60+ years of technology leadership and product innovation CORE TURBO • Highly-engineered products deeply integrated with customers • Broadest po
Slide 16: Global scale and broad product portfolio
2 Technology leadership and broad portfolio of products with breakthrough capabilities Global scale and broad product portfolio MANUFACTURER LIGHT VEHICLE GAS LIGHT VEHICLE DIESEL COMMERCIAL VEHICLE E-BOOSTING MAJORï¬ï¬ï¬ï¬ GLOBAL PLAYERSï¬ï¬ï¬ï¬ ï¬ï¬ï¬ï¬ï¬ï¬ï¬ï¬ MEDIUM SIZE GLOBAL ï¬ï¬ – –PLAYERS ï
Slide 17: Comprehensive technology portfolio
2 Technology leadership and broad portfolio of products with breakthrough capabilities Comprehensive technology portfolio PURE ICE MILD-HYBRID (48V) FULL-HYBRID PLUG-IN HYBRID BATTERY ELECTRIC FUEL CELL ELECTRIC Audi SQ7 Toyota Prius Mitsubishi Outlander Tesla Model S Honda Clarity CORE Core product
Slide 18: Global technology presence
3 Long-term co-development with global OEMs and a worldwide aftermarket platform Global technology presence WOLFSBURG Germany 5 R&D Centers MUNICH STUTTGART Germany Germany PRAGUE Czech Republic THAON-LES-VOSGES ~1,200 Engineers BRNO France PLYMOUTH Czech Republic PEORIA Michigan Illinois BASILDON B
Slide 19: Customer Experience: Strong global relationships
3 Long-term co-development with global OEMs and a worldwide aftermarket platform Customer Experience: Strong global relationships PRE- PRODUCT VEHICLE AFTERMARKET DEVELOPMENT DEVELOPMENT PRODUCTION 10-15 YEARS 4 YEARS 2 YEARS 3-5 YEARS • Serve nearly all OEMs • Single supplier per engine KEY INNOVAT
Slide 20: Early and broad customer engagement
3 Long-term co-development with global OEMs and a worldwide aftermarket platform Early and broad customer engagement PRE-DEVELOPMENT PRODUCT DEVELOPMENT 4 YEARS 2 YEARS Start of Joint technology assessment Customized and qualified to customer needs Production OEMs Projects in Launches local & global
Slide 21: Strong revenue visibility supported by robust win rate
3 Long-term co-development with global OEMs and a worldwide aftermarket platform Strong revenue visibility supported by robust win rate Wins on key engine platforms OEM revenue visibility1 (% revenue awarded today for future years) 4% 1.0L to 1.5L 43 45%+ New business 38 13% Competitions won 9% Gaso
Slide 22: Customer Experience: Local player in China and India
3 Long-term co-development with global OEMs and a worldwide aftermarket platform Customer Experience: Local player in China and India China Highlights India Highlights • Local market player since 1994 • Serve almost every FORD FIGO JMC YUSHENG OEM in region ASPIRE development 2.4L DIESEL 1.5L DIESEL
Slide 23: Strong aftermarket platform with brand equity
3 Long-term co-development with global OEMs and a worldwide aftermarket platform Strong aftermarket platform with brand equity Broad aftermarket product portfolio #1 in global brand awareness ORIGINAL • Original supply ensuring 5,300+ EQUIPMENT / emission compliance Product INDEPENDENT References AF
Slide 24: Integrated Supply Chain – A Global Operating System
4 Best-in-class global manufacturing footprint with operational excellence and agility Integrated Supply Chain – A Global Operating System 13 state-of-the-art manufacturing facilities WATERFORD CHEADLE PRESOV 4,500 employees across 17 countries Ireland UK Slovakia ANSAN THAON-LES-VOSGES Korea BUCHAR
Slide 25: Strong financial performance
5 Attractive financial profile Strong financial performance H1 2018 highlights • Organic revenue growth of 7% • Consolidated EBITDA margin of 20%1,2 • Consolidated EBITDA less Adj. capital expenditures3 conversion rate of 90%1,2,4 • Adj. capital expenditures3 ~2% of net revenues 1 Consolidated EBITD
Slide 26: Garrett is a cutting-edge technology provider
Garrett is a cutting-edge technology provider that enables vehicles to become safer, more connected, efficient and environmentally friendly • Differentiated technology / Broad innovative product portfolio • Best-in-class global manufacturing / Operational excellence / Low cost • Deep-seated customer
Slide 27: Garrett is emerging as an independent company from a position of strength
Garrett is emerging as an independent company from a position of strength “…the Turbo equity story is outstanding. This is a market leader that’s continuing to gain share, and that’s not me selling. That’s reality based on the kind of win rates that we are seeing in Turbo Technologies. And now you c
Slide 28: Technology Overview
Technology Overview Craig Balis—CTO
Slide 29: Technology at Garrett
2 Technology leadership and broad portfolio of products with breakthrough capabilities Technology at Garrett • Technology-driven growth, propelled by industry macros • Cutting edge technical solutions on turbo, electrification, and software • Strong customer collaboration which accelerates innovatio
Slide 30: Technology growth strategy
2 Technology leadership and broad portfolio of products with breakthrough capabilities Technology growth strategy • Strong global macros, turbo is a core enabling solution for OEMs CORE TURBO • Advanced technology that we have mastered and differentiated • Core turbo innovation and new content requi
Slide 31: Technology growth strategy: Core turbo
2 Technology leadership and broad portfolio of products with breakthrough capabilities Technology growth strategy • Strong global macros, turbo is a core enabling solution for OEMs CORE TURBO • Core turbo innovation required by advanced powertrains • Advanced technology that we have mastered and dif
Slide 32: Turbocharging – technology at the cutting edge
2 Technology leadership and broad portfolio of products with breakthrough capabilities Turbocharging – technology at the cutting edge Journal bearing clearance ~ 0.0004 inches of oil film… From 50,000 RPM to 200,000 RPM … 7 times thinner than human hair in less than 2 seconds… … 3 seconds for F-16 e
Slide 33: Modern powertrains need a turbo
2 Technology leadership and broad portfolio of products with breakthrough capabilities Modern powertrains need a turbo NEW POWERTRAIN ENABLED BY TURBO REQUIRING… STRATEGIES… INNOVATIONS High efficiency wastegate turbo Improved fuel Economy Engine downsizing ENVIRONMENTAL Current & growing REGULATION
Slide 34: Example of gasoline powertrain evolution
2 Technology leadership and broad portfolio of products with breakthrough capabilities Example of gasoline powertain POWERTRAIN Naturally Downsized turbo Enhanced Hybrid EVOLUTION aspirated V6 3.0L 4 cylinder 2.3L combustion 4 cylinder 2.0L Increased performance (15%) CO2 (10%) CO (10%) CO2 2 Enable
Slide 35: Engineering footprint aligned with customers
2 Technology leadership and broad portfolio of products with breakthrough capabilities Engineering footprint aligned with customers STUTTGART MUNICH WOLFSBURG Germany THAON-LES-VOSGES BRNO France PEORIA Czech Republic Illinois Basildon Bucharest UK Seoul Indianapolis PLYMOUTH Romania Korea Tokyo Ind
Slide 36: Technology growth strategy: Electrification and software
2 Technology leadership and broad portfolio of products with breakthrough capabilities Technology growth strategy • Hybrid and connected vehicles creating opportunities for new technologies ELECTRIFICATION • Developing differentiated solutions from cross-Honeywell incubators & SOFTWARE • E-Boosting,
Slide 37: Turbocharging electrified powertrains
2 Technology leadership and broad portfolio of products with breakthrough capabilities Turbocharging electrified powertrains mm units production per year Mild-Hybrid (48V) High Voltage Hybrid Fuel Cell Electric % in mix Mild-Hybrid (48V) >20% Audi SQ7 Mitsubishi Outlander Honda Clarity Core Base tur
Slide 38: E-Boosting is a great fit with hybrids
2 Technology leadership and broad portfolio of products with breakthrough capabilities E-Boosting is a great fit with hybrids Two ways to use available electric power in a hybrid powertrain Two E-Boosting Solutions TO E-BOOSTING SYSTEM 10x ICE BOOTSTRAP EFFECT E-Compressor + Turbo • Paired with a tu
Slide 39: E-Boosting… expanding scope beyond turbo
2 Technology leadership and broad portfolio of products with breakthrough capabilities E-Boosting… expanding scope beyond turbo ADDITIONAL SOFTWARE CORE TURBO CONTENT E-BOOSTING CONTENT CONTENT HIGH SPEED BASE TURBO E-MOTOR ENGINE CONTROL MODULE CONTROLLER TURBO—+ + + E HIGH SPEED BASE TURBO E-COMPR
Slide 40: Hydrogen fuel cell electric vehicle opportunity
2 Technology leadership and broad portfolio of products with breakthrough capabilities Hydrogen fuel cell electric vehicle opportunity Hydrogen fuel cell benefits Need high performance E-Compressor • Zero emission (electric traction) • Garrett in production since 2016 • Real life long range (500-600
Slide 41: Connected and autonomous vehicle opportunities
2 Technology leadership and broad portfolio of products with breakthrough capabilities Connected and autonomous vehicle opportunities MORE CONNECTED AND AUTONOMOUS VEHICLES OEM AND USER CHALLENGES GARRETT SOLUTIONS Global Light Vehicle Sales Mix 120% Industrial strength Safety and security Connected
Slide 42: Garrett vehicle monitoring offering
2 Technology leadership and broad portfolio of products with breakthrough capabilities Garrett vehicle monitoring offering INTEGRATED VEHICLE CYBER SECURITY HEALTH MANAGEMENT X-HONEYWELL INCUBATOR DECADES AEROSPACE EXPERIENCE • Automotive intrusion detection software • Failure prognostics • Security
Slide 43: Technology growth strategy: Pipeline
2 Technology leadership and broad portfolio of products with breakthrough capabilities Technology growth strategy • Building on core competencies PIPELINE • Applying high speed motors and model-based controls to new challenges • Exciting new concepts pipeline in Proof of Concept with customers Copyr
Slide 44: Leveraging Garrett capabilities for growth pipeline
2 Technology leadership and broad portfolio of products with breakthrough capabilities Leveraging Garrett capabilities for growth pipeline INNOVATION PIPELINE KEY COMPANY STRENGTHS • High speed rotation MECHANICAL • High precision • High temperature Electric Vehicle • traction drive • High speed mot
Slide 45: Technology at Garrett
2 Technology leadership and broad portfolio of products with breakthrough capabilities Technology at Garrett • Technology-driven growth, propelled by industry macros • Cutting edge technical solutions on turbo, electrification, and software • Strong customer collaboration which accelerates innovatio
Slide 46: Operational Overview
Operational Overview Thierry Mabru—SVP Integrated Supply Chain
Slide 47: Differentiated integrated supply chain strategy
4 Best-in-class global manufacturing footprint with operational excellence and agility Differentiated integrated supply chain strategy • Highly differentiated manufacturing capability • Low cost—leading operating system • Advanced supply base management Copyrights © 2018 Garrett Motion Inc. Best-in-
Slide 48: Integrated Supply Chain – A Global Operating System
4 Best-in-class global manufacturing footprint with operational excellence and agility Integrated Supply Chain – A Global Operating System 13 state-of-the-art manufacturing facilities WATERFORD CHEADLE PRESOV 4,500 employees across 17 countries Ireland UK Slovakia ANSAN THAON-LES-VOSGES Korea BUCHAR
Slide 49: Highly differentiated manufacturing
4 Best-in-class global manufacturing footprint with operational excellence and agility Highly differentiated manufacturing Differentiated internal manufacturing technologies • Home-grown “Industry firsts” for high-speed electron-beam and laser welding • Proprietary super high speed balancing • atent
Slide 50: Low cost – Leading operating system
4 Best-in-class global manufacturing footprint with operational excellence and agility Low cost – Leading operating system 75%+ of capacity in high growth regions • Closure of Italy in H1 2018 • Slovakia and China greenfields ramped up to full maturity in 5 years • Biggest Turbo factory in Bucharest
Slide 51: Advanced supply base management
4 Best-in-class global manufacturing footprint with operational excellence and agility Advanced supply base management Supplier’s Development and localization • 400+ global suppliers, 70% of spend in HGR • 20+ new suppliers developed in HGR over the last 3 years Driving Innovation at Suppliers • 10+
Slide 52: Driving to the lowest cost / highest performance
4 Best-in-class global manufacturing footprint with operational excellence and agility Driving to the lowest cost / highest performance • Global and scalable footprint, 75%+ in high growth regions • Make-vs-buy driven by technology differentiation and value retention • Comprehensive supply base mana
Slide 53: Financial Overview
FINANCIAL OVERVIEW Alessandro Gili—CFO
Slide 54: Solid track record of consistent performance
5 Attractive financial profile Solid track record of consistent performance 1 Net revenue Consolidated EBITDA ($mm) ($mm) Impact of $175mm % margin (excl. Honeywell Indemnity Obligation payment) $3,096 Honeywell Indemnity % margin (incl. Honeywell Indemnity Obligation payment) $2,908 $2,997 Obligati
Slide 55: Revenue bridge: 2015 – 2017
5 Attractive financial profile Revenue bridge: 2015 – 2017 ($mm) $3,096 $44 6% $2,997 ($93) $148 $117 ($21) ($7 ) (8%) 16% $2,908 23% (1%) (1%) 2015 Gasoline Diesel Commercial Vehicle, 2016 Gasoline Diesel Commercial Vehicle, 2017 Aftermarket, Aftermarket, Software Software & Other & Other 3% Organi
Slide 56: Revenue bridge: H1 2017 – H1 2018
5 Attractive financial profile Revenue bridge: H1 2017 – H1 2018 ($mm) $1,792 $63 6% $57 (2%)1 $124 28% $1,547 H1 2017 Gasoline Diesel Commercial Vehicle, H1 2018 Aftermarket, Software & Other 28% Organic growth in gasoline (2%) Organic decline in diesel 6% Organic growth in commercial vehicles and
Slide 57: Strong revenue visibility
5 Attractive financial profile Strong revenue visibility OEM revenue visibility Takeaways ï,§ Near-term revenue nearly 100% booked (% revenue awarded today for future years)ï,§ 2022E awarded trends are consistent with 4% what the business has seen historically 13% New business 9%ï,§ 2022E awarded an
Slide 58: Garrett has a well-positioned cost structure
5 Attractive financial profile Garrett has a well-positioned cost structure Cost structure evolution Takeaways Past Todayï,§ Highly-variable cost structure to support the business through the cycle % Variable cost 67% 80% structure ï,§ No large restructuring initiatives planned % Low-cost 42% 75%ï,§
Slide 59: Operating costs breakdown
5 Attractive financial profile Operating costs breakdown Operating costs ($mm, consistent with Form 10 figures) $2,745 $2,740 $2,532 Cost of good sold $1,573 (excl. R&D) 2,255 2,240 2,069 $1,367 1,298 1,103 59 68 R&D 110 110 121 SG&A 186 197 119 126 249 Other Expense 167 183 130 86 81 2015 2016 2017
Slide 60: Superior margin and cash flow metrics
5 Attractive financial profile Superior margin and cash flow metrics 1 2017 Consolidated EBITDA Margin 2017 Consolidated EBITDA less Adj. capital expenditures conversion1,2,3 4 4 Peers Peers 84% 20% 78% 15% 14% 56% (excl. Honeywell (incl. Honeywell Median (excl. Honeywell (incl. Honeywell Median Ind
Slide 61: R&D and capital expenditure overview
5 Attractive financial profile R&D and capital expenditure overview R&D Priorities Historical R&D Spending ($mm, consistent with Form 10 figures) $121 • Strong portfolio of patents, applications and trademarks $110 $110 • Ample research underway to support long-term product development • Long lead t
Slide 62: Operating working capital breakdown
5 Attractive financial profile Operating working capital breakdown Operating working capital ($mm, consistent with Form 10 figures) ($425) ($498) ($447) ($417) Trade receivables $745 $850 $567 $640 Inventory $136 $125 $188 $175 Trade payables ($685) ($736) ($860) ($891) Accrued liabilities ($435) ($
Slide 63: Balance sheet overview
5 Attractive financial profile Balance sheet overview Garrett balance sheet (Form 10) Obligations payable to Honeywell (in $mm) Total Commentary • Impact of Indemnification and Reimbursement Agreement with Honeywell Honeywell • Represents 90% of Honeywell’s legacy Bendix asbestos Indemnification $1,
Slide 64: Honeywell Indemnification Obligation Agreement mechanics
5 Attractive financial profile Honeywell Indemnification Obligation Agreement mechanics Agreement Mechanics Financial Framework for Equity Holders • HON makes estimate at beginning of each • Indemnity payment similar to an annual year for annual payment “expense” • HON hedges to Euro’s-no FX risk to
Slide 65: Targeted capital structure
5 Attractive financial profile Targeted capital structure Sources and uses Sources ($mm) Amount Uses ($mm) Amount $500mm Multi-Currency RC Facility (undrawn at close) $—Dividend to Honeywell $1,628 New EUR Term Loan A 400 Financing fees, OID and other expenses 32 New Cross-Border Term Loan B2 750 Ne
Slide 66: Financial goals through 2022
5 Attractive financial profile Financial goals through 2022 Revenue growth targets 4–6% CAGR Consolidated EBITDA1 margin 18–20% (excluding impact of Honeywell Indemnity Obligation payment) excluding I/O Payment Adj. capital expenditures2 3–3.5% of sales Tax rate ~27%, improving through 2022 Liquidit
Slide 67: Conclusions & Key Takeaways
Conclusions & Key Takeaways Olivier Rabiller—CEOer
Slide 68: Extending growth into new technology domains
Extending growth into new technology domains ELECTRIC VEHICLE SAFETY-CRITICAL FUNCTIONS SOLUTIONS FOR AUTONOMOUS VEHICLE 2025 FUEL CELL E-COMPRESSOR Advanced bearings System integration SOFTWARE FOR VEHICLE ANOMALY DETECTION 2020 Model-based & advanced controls Integrated vehicle health management,
Slide 69: Key Garrett priorities
Key Garrett priorities • Be supplier of choice for all global engine platforms GLOBAL MARKET LEADERSHIP WITH ACCELERATING MACRO • Leverage our strong position in high growth regions to overdrive local macros growth TAILWINDS • Keep optimizing our geographic and channel coverage in aftermarket TECHNO
Slide 70: Appendix
Appendix ADVANCING MOTION
Slide 71: ICE & Hybrids are the most cost competitive powertrain
Internal Combustion Engines (ICE) & Hybrids are the most cost competitive powertrain BEV: $9.3K, 0g/mi CO2 ICE: $2.1K, 380 mile range, 220 g/mi CO2 Motor: $1000 T/M: $150 Electronics: $2200 Battery Pack: $6K Engine: $1000T/M: $350 Electronics: Exhaust: Fuel Tank: $150 $500 $80 Powertrain Cost BEV (2
Slide 72: Summary of Honeywell Indemnification Obligation
Summary of Honeywell Indemnification Obligation What is the background? • Honeywell is transferring responsibility to Garrett for certain Transportation Systems liabilities in connection with the separation • The liabilities are comprised of asbestos liabilities, predominately Bendix, as well as som
Slide 73: Honeywell indemnity obligation liability overview
Honeywell indemnity obligation liability overview Overview of Honeywell Indemnity Obligation liability and accounting treatment Honeywell ï,§ Bendix Corporation dates back to the 1920s and historically sold brake pads that contained asbestos Indemnity ï,§ Honeywell acquired Bendix through its merger
Slide 74: Consolidated EBITDA Walk: 2015 – 2016
Consolidated EBITDA Walk: 2015 – 2016 ($mm) % of Net revenues 11.1% 17.2% 17.6% 11.7% $526 $499 (2) (8) (11) 1 11 36 (175) 175 $351 $324 Consolidated Indemnity Consolidated Volume Price/Prod’ty SG&A R&D Non-Recurring FX Impact Consolidated Indemnity Consolidated EBITDA 2015 Obligation EBITDA excl Mi
Slide 75: Consolidated EBITDA Walk: 2016 – 2017
Consolidated EBITDA Walk: 2016 – 2017 ($mm) % of Net revenues 11.7% 17.6% 20.1% 14.5% $623 2 2 (12) 28 $526 37 (175) 40 $448 175 $351 Consolidated Indemnity Consolidated Volume Price/Prod’ty SG&A R&D Non-Recurring FX Impact Consolidated Indemnity Consolidated EBITDA 2016 Obligation EBITDA excl Mix/D
Slide 76: Consolidated EBITDA Walk: H1 2017 – H1 2018
Consolidated EBITDA Walk: H1 2017 – H1 2018 ($mm) % of Net revenues 14.2% 19.8% 20.7% 15.8% $372 (8) (9) (88) $307 (8) -0 40 49 $284 88 $219 Consolidated Indemnity Consolidated Volume Price/Prod’ty SG&A R&D Non-Recurring FX Impact Consolidated Indemnity Consolidated EBITDA 2017 Obligation EBITDA exc
Slide 77: Consolidated EBITDA reconciliation
Consolidated EBITDA reconciliation Consolidated EBITDA reconciliation Commentary LTM $mm 2015 2016 2017 6/30/181 1H 2017 1H 2018 Inclusion of $175mm Honeywell Indemnity 1 Net income (loss) (GAAP) $254 $199 ($983) ($955) $180 $208 Obligation payment Plus: income taxes 114 51 1,349 1,353 8 12 Removal
Slide 78: Calculation of Consolidated EBITDA Margin and conversion
Calculation of Consolidated EBITDA Margin and Consolidated EBITDA less Adj. Capital Expenditures conversion Constant currency 6 months ended 6 months ended 6 months ended 12 months ended 12 months ended 12 months ended ($mm) June 30, 2018 June 30, 2018 June 30, 2017 December 31, 2017 December 31, 20
Slide 79: Adj. Capital Expenditures reconciliation
Adj. Capital Expenditures reconciliation Adj. capital expenditures reconciliation Commentary LTM 1H 1H $mm 2015 2016 2017 6/30/181 2017 2018 1 Relates to Garrett Property, Plant & Equipment Total Capital Expenditures (included in Form 10) $50 $84 $103 $116 $34 $47 1 Adjustments and changes in PPE re
Slide 80: Reconciliation of Organic Sales % change
Reconciliation of Organic Sales % change 6 months ended 12 months ended 12 months ended Garrett June 30, 2018 December 31, 2017 December 31, 2016 Reported sales % change 16% 3% 3% Less: Foreign currency translation (9%) (1%) 0% Organic sales % change (Non-GAAP) 7% 3% 3% Gasoline Reported sales % cha
Slide 81: Garrett
Garrett ADVANCING MOTION