GTX - Earnings call transcript Q1 2019

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Operator

Hello, my name is Kate and I will be your operator this morning. I would like to welcome everyone to the Garrett Motion's Financial Results Conference Call. This call is being recorded and the replay will be available today. After the company’s presentation, there will be a Q&A session. I would now like to turn the call over to Paul Blalock, VP, Investor Relations.

Paul Blalock

Kate. you, Thank thanks XXXX and to Motion's Garrett Welcome results for conference quarter financial call. first everyone listening

Before we Garrett. Garrett begin, presentation I other to would like to along filings release you'll find with available our where SEC and information mention are on website the about Motion important also links press that today's

understand the referring statements press and presentation XXXX of non-GAAP we of known those asbestos-related risk Also and in such. to provided liability GAAP and presentation. of Indemnification payable using to in describe Liability. our own found in are operate in future and of and financial Honeywell slide Agreement be should with the Turning us Honeywell, our financial you're assessment by encouraged be which to factors. Reimbursement to you future forward-looking accordance payable performance consolidated its encourage a way the those only. and in this contained appendix products balance the we based and only that to and terms to read diesel gasoline Indemnification in in light liability the become factors each aware our otherwise estimates to date March In Agreement. the respect the the also slide vehicle presentation. in financial On X, information is information and of as the of combined and release sheet our terms obligations the post-spin claims taken as Reimbursement business. reported on which the and of to to terms Today's risks uncertainties we manage historical numerous understand terms of by disclaimers the examine our and the reflects for million and of We filings, basis calculated notice uses today's Indemnification estimates business, both XX, term Liability comments, payments related carve-out its additional diesel of reconciliations the The X vehicle and are liability in gasoline number with and and will is to please slide presentation closest this the asbestos-related of The Honeywell's presentation light reconcile nature financial with of accordance Honeywell as as such Honeywell terms based with $X,XXX accounts our today. standalone results Indemnification of a our on to amount

As previously was disclosed determined in related and the our our XX, internal XXXX, material our has weakness there Indemnification our to our evidence for under Honeywell financial supporting consolidated financial liability combined December Reimbursement for the a to in management Form control and over XX-K and reporting statements that Agreement.

insurance Specifically, amount reported to we of including actuary we amounts in certain settlement of information used our independently calculate of provided and the information that verify Honeywell's the Indemnification receivables. Liability to provided the and to were values us accuracy unable Honeywell

through remediated. with assessment Honeywell certain been information additional has -- we us This process certain the probable receivables iterative Honeywell. example, an make dialogue obtain provide In our about material of recoverable. For insurance weakness not outcome sufficient not are a are underlying whether advisors, to yet Liability working information with proceedings independent of did stated to and information asbestos and consultation with Indemnification the the

and high it remains process the still are a engaged priority in company. for We that

today Olivier. Alessandro is President Olivier will it hand and those of to Vice CFO. and it's With now Senior Following time purpose and our our I turn CEO; to over today's call. to President comments now the Gili, main Rabiller, us

Olivier Rabiller

earnings coupled achieved financial business industry, on model. cover more conference is margin metrics, while our XXXX Thank were you, This few well solid once outperforming high first with moments. Alessandro control clear overall a global the quarter strong will technology in results, variable first Paul, key high and we and Garrett's products our of call. as profile. record cost quarter with X, in welcome for structure our performance track again automotive Garrett's to Garrett cost slide in first expectations preserving details attributable of quarter our everyone of begin across our the the content and line results I high will to the performed

of the partially and to talk products anticipated, As moment, rebalancing our in I towards but comprising X% quarter portfolio XX% a by basis net more commercial XX% XXXX. slowdown production, net and growth the reported in primarily sales global strong vehicles. gasoline with accelerated on will organically, products about offset sales due in in X% declined versus gasoline ongoing gasoline of products QX the the it in

adjusted adjusted a late margin and an an in EBITDA, with quarter, slowdown attractive industry, margin in automotive accomplishment the the began posted in million which of EBITDA During maintained profile given we the first XXXX. XX%, notable $XXX

discuss EBITDA on XXXX. margin and basis with first XXX As compared the adjusted the sequential later, improved in Alessandro points QX basis a will XX% quarter as increased

and on our net a quarter off We for Overall, and billion. the $XX the declined stands to in our XXXX maintain confident focus year. slowdown to the full we despite our $X.XXX profile track our of meet previously on debt also outlook financial start de-leveraging now remain industry, and at the is of million strong stated Garrett first as

regulatory advancing achieve continue our the increasingly across and challenges progress platforms. the [indiscernible] We address important to global helping motion stringent customers meeting of requirements

we portfolio. process to in product ongoing illustrate X, on the our rebalancing slide Turning

of to XXXX gasoline last for QX North increase, of we the compared side year, in unchanged new last geographic sales. ramp-up were see the we strong of in slight you In compared with we left-hand largely was And Garrett slide, sales net in the in quarter, experienced the as America with a very China. slowdown that anticipated On our year as makeup an platforms. China, this had thanks

expecting On percentage first the the sales last moment were side, XX% estimate products XX%, of quarter I a for QX In over that year. mentioned decline line net quarter as of gasoline a reduction diesel XXXX. grew from mentioned from year first of totaled up to our industry the points of quarter percentage full ago, products XXXX, In diesel XXXX. double-digit point sales, percentage low with in X the we we we product representing of X of a last

more and customer turbos. migrated Garrett from to Garrett turbo applications we As diesel gasoline more

progress remain strong to therefore by records of our be ramp-up equivalent roughly and [indiscernible] the gasoline despite on date, Importantly, track of our revenue margin robust gasoline initiative to diesel strong we end profile of track XXXX. helped Based significant on a successful Garrett maintain productivity the to platforms.

of we and half confident chain year to in increased integrated we strong decline The gains ultimately margin new growth a positioned of going second our later in expect to for and differentiated in currently strong We will with especially our majority to is expected performance compensate lead demand light-vehicle gasoline programs are our applications continue model, strong supply that forward to diesel. remain maintain higher than our well technology programs gasoline the the win With the to launch in share scheduled and are scale profile. year, combined more this volumes.

continue positive quarter of Lastly, sales, net and short-term for generate of in correlated the and commercial important not first generally verticals These aftermarket up combination auto vehicle the from XXXX. to are of with our sales. products, XX% the returns XX% account

clear Xst to X being electrified/hybrid meet used Tier approach key at driving become of slide milestones a year. content of growth on pushing this emission X. into and for believe cost advanced where priority relentless Turning strategy and OEs advanced core engine are remains success our will we of the our of example the technology the visible to Globally company, solutions to long-term as contribute are profiles COX which part technology China most our electrified we to our -- and is be increase the combustion to our necessary production Garrett meet depicted will a high-value our company. applicable platforms, China powertrain they of this standard July for reduction later to margin year applicable enable chain pursue that the here we and for see supply ICE beginning the disciplined, unique, turbo directed can launches On the using technology stringent is result whether solution as strategy key standards. systems air the platform sustain of in lowest multistage operating increasingly for A cities innovations we customers of automotive business, This the loop industry opportunities sourcing. X upcoming pure pursuit accelerating makers our through their this are the engines technology or platforms.

for platform, demonstration In show have management addition [vehicle] cybersecurity electric at the for solutions. to increased health interest held our the turbo-charging activity and recently our Shanghai integrated increased and we seen

During we maintained Europe several the and the in momentum programs first have new and our quarter, Asia quarter. pilot current launched in

fuel-cell a We minutes. I will more activity about generation around are few next compressor, which considerable also receiving in talk

Lastly our experience our and technology model-based in unique project pipeline builds controls, on speed motors. high software competency

initially looking with are we initiatives. forward our to making are We now studies adding ideas and breakthrough soon feasibility progress to good more

Turning now to X. slide

engines. for our powertrains. optimized well Euro of for performance X are see standards low electrified will for the suited You These solutions e-boosting small and roadmap speed

in be loop XXXX to air an the mass expect to E-Turbo with easier market packaging including controls. with the We solution first

voltage customer content the the of in high high opportunity Our expertise are speed enable receiving solutions. these powertrains, the provided in higher and large serving upcoming interest which search market motor electronic by availability continued

technology our more with mastering importantly, associated to electric opportunities motors electric to super innovation More promising high-speed a portfolio. offers

solution, China's for to of recently times. fuel-cell refueling real-world duty and fuel-cell our -- are X with the battery was electric Interestingly, how we Father win vehicles and due expertise Shanghai the China order broader ranges saying, hydrogen like in heavy cell to short increasingly major commercial help Today solutions report, a differentiated Car Wan the Technology fuel about direction. And the the formerly cell as the at At based the recent charger I am a and Electric many many our better building our is domains, part technology customers future option than power we This both discussion of the mechanical of our particularly fuel-cell as of the as is Minister to development driving Industry in former such cells. and and fuel Moving to can Gang, already electric in market. the emission, Science zero powertrain for quoted drives accelerate the show, of China. buses. directed regarded fuel the of directly excited suitable known on future slide first in to are towards was glad benefits

unique will air in technology Garrett's Gen from much our to size, which products Gen greater free forward, bearing X oil to Going X smaller with products will volume. compressor be Gen lower evolve and continue X cost in

positive We expect for around breakthrough continue customers these and gain to traction in solutions. to our elsewhere critical Asia

the to discuss Alessandro Turning from the now hand our QX in and long-term will details. to to short-term, back more over I results

Alessandro Gili

Olivier will the review welcome my nine. start Thanks, everyone. on of and I financials slide

by X% million $XXX Olivier sales basis were or in first were with down compared the organically as basis reported on fourth a X% the sales. Net mentioned, This sequential on and up over net the a or of $XX XXXX which million XXXX. were net compared with first repeated $XX quarter and in million As X% X.X% quarter as $XX XXXX, the tax last million, was quarter XXXX, representing XXXX. QX, driven first of grew income year XX% expenses not in QX largely in XXXX approximately of to one-time quarter

XX% of our below rate sales, XX in year basis and tax represented QX, was $XXX EBITDA a points XXXX, Adjusted in XXXX, effective of vary a decrease totaled from XXXX slightly net of which first XX% quarter million ago. year-over-year Our from can the outlook. XX% down quarter-to-quarter

in a XXX XX% However, to quarter of in in the cash QX. -- XX% Adjusted points. as free a stronger sequential million had leverage Overall, in productivity is from testament margin of EBITDA. EBITDA year improved XXXX XX% first last on mentioned, This quarter, the sorry basis the by statement quarter XX% year our net approximately QX, $XX basis represented Garrett impact from Capital margin Olivier environment. challenging but from was million Adjusted XXXX margin last not net adjusted consistent increased a -- which more gasoline flow a was million, also $XXX expenditures first quarter $X platforms the quarter environment, from of only launches, $XX with in solid X.X% million of sales improvement in compensated were the Garrett for the of sales. slight and and focus in EBIT in down a -- and last the quarter current expectations. down and our adjusted light drove were

Turning to XX. slide

line products while sales of X% decline decline rebalancing in at diesel with a XX% And year new down to the constant In diesel in problems organic vehicles of or results performance, to volumes. were XX% products discussed turbos the key million shipments. Most in gasoline were growth and industry-related $XX of due increase, were million gasoline portfolio our earlier. largely million, customer representing net our quarter year for Our off growth $XX the breaking We products this by versus were declined and gasoline and remainder due last Garrett $XX more was believe the million, our a organic offset this products were diesel currency declines plans. run $XX decline. aftermarket problems respectively. the shift and X%, diesel to which planned than in up Commercial representing the lower Olivier will the

Turning now to slide XX.

You as QX, our compared EBITDA to EBITDA walk XXXX QX and XXXX. see for adjusted adjusted

was FX slide $XX For driven from FX initiatives, in year. highly product in mentioned million continuous provide X% driven On $XX at variable a were discussed QX, last our due million quarter, adjusted weaker offset partially year-over-year, from XXXX productivity. by to detail Also before currency million, the and earlier, Overall, versus impacts contributed taxes. by EBITDA impact lower volumes, XXXX. income coupled $XX was was favorable. shift impact million performance we $XX our a despite adjusted constant hedging of positive dollar to earlier. productivity price XX% by total margin our QX, mix with The structure cost euro down to more million XX, focus on the regarding $XXX EBIT This

interest in the result As you Honeywell to important $XX a capital XXXX million reflects structure the of our spin-off. pre-spin the can to asbestos expense see, reflects that debt $XX It post-spin $XX the On QX, the to of also whereas note higher XXXX to expense million XXXX versus largely in on XXXX. year-over-year to QX, issuance comparison the $XX lower period prior expenses higher QX, before the after as expenses in indemnification income a basis of post net -- a taxes the million a spin XXXX interest quarter. in due reflected million declined of to basis, QX, QX, is in

show $XX Turning $XX improvement decrease increase the to XX. We our in resources and liquidity capital million net slide reflecting million an in and debt. cash in

no have near We also new maturities in the term. significant

times net-debt-to-consolidated our our strong at to utilizing balance million. remains ratio generation our Importantly, cash focused liquidity was We de-leverage remain on $XXX EBITDA available three and our sheet.

provide graphical depiction Turning walk to We XXXX. a of net slide our XX. debt since

XXXX. net a moment as mentioned we debt reduced I billion to our March As of XX, ago, $X.XX

by flow by the which working in For largely cash our capital, $XX first the quarter, of was receivables. which was the QX flow, ongoing cash we operations. impacted free represent free minus adjusted quarter cash generated million $XX seasonality driven typical timing leverage core generation from million in of

our There QX no our net were of quarterly drop And Our basis. the $XX receivables mandatory start slide million Addition tax. our shipments were declined in that to increase the during which Honeywell. compared related year. cash On non-linear the note net in low and significantly partially summary, in $XX quarterly free in the This than year fluctuate weeks to XXXX March very payments transition last resulted following quarter that we the by quarter our sheet end lower strong in with taxes are XXXX a offset XX, of Honeywell the $XX working was by of of cash obligation for Honeywell from in obligation. for cash payment two total QX in levered cash can the indemnification next as debt December capital balance quarter, this typically million balance taxes million to the is conversion the XXXX. significantly first average items working towards capital to fourth in December. positive relatively The on XX, XX, a flow

reduced Our of result XXXX updated Honeywell as December as QX liabilities XX, XXXX provided in of FX. and as indemnification by claims $XX since payment were the impact million by well million a experience $XX

the transition in paid the As QX, in same stands tax while which $XX make XXXX. to This million indemnification billion a Honeywell. with at given amount now is was respect a in obligation, did kept we $X.X April reminder, $XXX to at mandatory cash any that payments no And was QX there entity payment is million payment of year.

first is MTT last pleased in with the the added years. eight-year our each confront our It in for well XX%, and That payment our targets back positioned will schedule and five achieve in my total Our of to and results, respectively years long-term are believe hand quarter same. Overall, today the Olivier we first to previously XX% concludes of provided remains I'm to the X% it XX%, strategic three comments I XXXX outlook. and

Olivier Rabiller

Alessandro. you XX, provided in QX solid a expectations. to XXXX our slide and start line In Thank on with our summary results were

and our macro conditions softer the margin further reduced volumes profile to lower we debt. net maintain market Although, led attractive

discussed, positive remain business long-term intact. fundamentals our As the of

X% EBITDA. remains organic as growth million XXXX anticipate $XXX and sales we $XXX year full for in outlook X% million unchanged Our in to to of adjusted

launches China expect and demand for upon to platforms and scheduled Garrett. relatively improving HX based for being softer Europe North continue HX HX and America stronger with We new stable

negotiations. Brexit major U.S.-China Of course, trade we negative from impact or are not a forecasting

of and interest, includes ongoing continue generation our We to products over and our flow gasoline Again, than Honeywell. in business. diesel, encouraged turbo by win levered I with in adjusted expected the indemnity cash flow is rates offset share conversion charger in particularly more global in our significant payment stabilize gains to which XX% Asia but cash target will strong believe excludes XX% which we free tax core am to time. to the ratio, free Europe decline

growth Q&A. our accelerate electrification In vehicles now and to I'll our Paul hand we for back remain it future in over today, remarks our and excited and by progress This continue connected addition, to the vectors concludes prospects. formal

Paul Blalock

Thanks Olivier.

reporting Obligation Before questions weakness need be will mention for under of I now course to not our ready actions the we our line, Indemnification taking future open to material related that we're today our financial on we questions. the Agreement. Operator, in

Operator

[Operator The of question go David first will Please from the now session. question-and-answer Instructions] begin is ahead. We Kelley Jefferies.

David Kelley

Thanks taking Good morning for guys. my questions.

remains looking Just like about productivity price it some the levers the you should to Can we initiatives, offset of maybe looks And and you at think of productivity XX to slide able like here, well. if volumes mix helped and offsets production as some it were weak? talk about how lower productivity pull? year the balance your sounds through

Olivier Rabiller

we've to now the to years our then the Garrett in maintain nothing also Well, our model we may deployment say, comes base recast do to explained the QX the even day factories. David, basically usual our I our possible. called further you that remember operating our fixed when system It's have effort. that acquired formerly one you -- we've we the softening. which has cost as from we of as is new it's low-cost low to use the discipline would in across We new and developing company there something that excellence are in it recipe And other. been business is implemented that And a the long-term not as

same them usually initiatives initiatives based. that's can we perceive pushing why special QX way. this are benefits on we the the nothing of So reason And just these long-term and the had in

David Kelley

outlook could global you. you year. on just And your Okay. update Perfect. then production if the for Thank for us

previously, granular, more And your I you conditions were seeing changes a are think there? a market X%. you maybe exposure any the minus getting European expecting little bit in given

Olivier Rabiller

we last very I we not China pretty aligned a market European you data data it's China, are points seeing if the the for at we the last with from weeks. the what frankly much is on about conveyed data recover point But had few betting had. the a you Europe, what data European were another Well we point Quite year. We obviously. you give discussion been are bullish probably get in the the about all the beginning remember If markets point strong that difficult. on would of not have on

CapEx saying implementation coming launches is We and those reason of cost the why reason to X of more flexible downs is are from been China that and with in ensure high-variable most that's are micro quite base percentage, push over of That's recovery X.X%. will have the to that of a supply the in remain that where having that's can we can X% low we the customers emissions. the years to focus company the light to we leveraging All-in-all, the low-fixed frankly are the the the we we our productivity. why soft a to our reason we've cost valuation why level and link continuous that

So would weak nothing what last for Europe of what said except that not you and versus is all-in-all, that new few recovering confirmation we've say were QX that the the remains in some probably China yet. week versus I

David Kelley

and And for pass Thanks. it. then me it's along one and I'll one. Got quick Okay. last

sales on net bridge. the slide XX Just

to other the think line? swing there Could you revenues. I was elaborate other impacts a in big on the

Alessandro Gili

business think considering don't of other swing in particularly the concerned timing about, a be it's had -- QX. last it's for company, be timing size of in so reported which $X to is the I year in the necessarily what of specific compared we we to that not revenues total the nothing big had could relevant million

David Kelley

my taking questions. for got right, All it. Thanks

Operator

is America Lynch. question Please of of The go from Merrill Smith ahead. Bank next Aileen

Aileen Smith

morning. questions. taking the for Thanks Good

little Obviously, half that slide the came first range deck second in down outlook flat total. X% then First and in prior your targeted organic XQ, below to question, first half sales X%. first the X% a of that gave to in half bit is you quarter XXXX up

could if in And to you relative first come of guide? within came that us a bit weaker? year more XQ organic if did pronounced back remind your in the the expectations the initial imply does growth on a where in little acceleration quarter perhaps this half So

Alessandro Gili

No. were in Actually, what – line we with absolutely expecting. is the the QX

we had February result we would that a already think and weak. have I visibility had January very as of we were QX more clear in

I have some think March. we actually seen in recovery

We and second for are have yet doesn't monitoring not quarter look what since we good. now, obviously it's April exceptionally consolidated

So overall of we are QX. not change seeing growth. for our organic any outlook are we in still monitoring But the terms year in

Olivier Rabiller

seeing just overall And I would recovery. based recovery just our the the that's have explained confirming QX we think that March Aileen did are end confirming to the was [ph] that that add March we signaling April when at on outlook result and are expecting are everybody of be this in China We we we why now – [consume] QX. doesn't QX. not

Aileen Smith

it even think not to little So versus provided it a it though updating to half deck explicitly you're balance fair what relative first and assume bit the different? in they your when or – we the second is is on is about the half cadence of slide hold

Alessandro Gili

based It's moment we too to But major from for of say seen any in deterioration. have haven't early terms what the on April. we visibility

Aileen Smith

Okay. margin EBITDA And second the commentary. on question adjusted and

compensated due year-over-year the was in stated some by elements basis was to? productivity just it on margin lower the offset of EBITDA productivity Or impact to it longer the by for really in on efforts a mix you? issue possible you You as revenue that press no significant the in mentioned. was to Is Is release you've it a decline bracket alluded quarter? the what

Alessandro Gili

have would still We it's that mix not. to positive liked be but

been mix, diesel So consistent negative productivity I it times. it's strong shift had gasoline we very offsetting multiple with from it. that think to we've than the have But more just a we still mentioning was

Olivier Rabiller

light from even confirming that's that we're there may variations mix offset pressure. to company some Aileen, the was if shift, that But short-term the that shift we've that But of said what macros. realizing the I a initiative driving was in in productivity the beginning in that also

QX in think are I we that. confirming

Aileen Smith

also business Great. came less And to the sales historically if OE perceived the as aftermarket quarter aftermarket But in be growth what's Can expect in I in market. a pressure one Is driving markets XXXX that Switching volatile? declined. gas Okay. away may. better global under aftermarket diesel last balance if you OE than question, might And the and would XQ you remind remain what a sales the even market cyclical it development? point to business shift your to in us at aftermarket overall? the we've from

Olivier Rabiller

to significant aftermarket lot I think our we the results posting you are of as in some as by that businesses them our that if results get numbers not published have that quarter been that of some peers a Aileen, were back some aftermarket. in good

cyclicality any So see don't I there.

Alessandro Gili

And actually aftermarket in we grew organically.

necessarily So don't see soft the being point of aftermarket in QX.

Aileen Smith

but the was change year-over-year? down I maybe press organic missing something X% release, sales the in

Alessandro Gili

X%. up actually It's No.

Aileen Smith

for it me. That's you. Thank Okay.

Operator

Nomura. is of The next John from go Please Sykes question ahead.

John Sykes

Hi. Yeah.

- would subtracted question just free realized based But payment rates to on calculation ask I've conversion given wanted flow around the Indemnity Just for year afterwards. MTT you something it your was your do free it cash what payment reduce or million have to I and – plan of you aren't a Is debt have the my on that? the cash now flow and else? is with $XXX I right

Alessandro Gili

Yes.

I key target since public think to is de-leverage. beginning the that we've been our

but it's and QX. seasonality of substantially being You've conversion, seen to in typical mostly said, softer terms we it's in as due and QX

of our are I think portion the in we part of visible our conversion. year are with at been was end a QX we year of – flow we've as terms cash of it And from Actually, already prior large year prior year. consistent we than better last the QX. So are generating

seasonality as So year. you trend the will part see similar of

not free the the is minor only de-levered MTT is this Indemnity quarter the Obligation indemnity be and payment. flow the cash including Just including

be we April. paid call, entity the the during of beginning the mentioned we As at

be part will QX of it results. So our

Olivier Rabiller

And change there. overall, no

the priority is business First the and then for to opportunities, at acquisition opportunity de-leverage bolt-on if we'll occurs. look

John Sykes

you -- with -- feel going to get said you when Like just you you're for you remind when leverage? me where or bolt-on acquisitions. And do look comfortable times to can Okay. two you

Alessandro Gili

what consolidated indemnity -- In less of amount we EBITDA is basically terms which our the million. terms in capped at of $XXX obligation adjusted EBITDA, of the

John Sykes

technology other the Okay. just on question. hasn't unlike the been people really -- why what off taken And market-type with it working have But cells know question it's is then time, yet? hasn't for fuel is I a batteries like -- other more quite that a a long of technical that

Olivier Rabiller

around that good -- fuel That's fuel are point Because the been say it flight is you The as so that made a moon. cells rightly first have the for the volume. There mean point. that it for was in years the -- possible and and about very cells But a and the more you was time these think to are it keep lot a therefore existed low starting very we vehicles of just battery-electric remains. I than not XXX to investment long it. very, into talk mind,

So a country there. China bit have have same a that's when little Where electric. limitation happens we people in comes a like some mind issue of see that battery especially realized the people is of it our that of pivoted to

today, leader a And look vehicle recently battery -- when you it electric is think our was materials. Indeed think it something raw But about of but So that lot not comes comes at some into realized a they is when the be offset is introducing of it's the I you when to is not it to battery of you look to at limitation the especially at especially Toyota when agile that price that are comes you recycling. mentioning them we cost, There saying electric vehicles. a cell a battery look when the the of today saying important negative, range, when electric important to of study important. part when factor you way decrease when the Well that side our our battery price fuel-cell are materials. -- will fuel fuel a structure our we curve to you from generation which at store the XX just put three but curve, of products the the get added. when the we compressor subgeneration top value with by represent look cell is a the at the the cell the the XXXX of look generations in cost equipment. if to the be flat doesn't of will level significant into And the fuel first cost to of the today, we've lot at cost presentation the think on vehicle planning that a a XX% is fuel so by raw we of

obviously So the and what cell. higher from are this added volume cost a value point on we higher when level is we fuel seeing have the are you of see progress end

a now I that would fuel-cell be think an of car hybrid. vehicle cost to are some to a of get the of targeting makers

an not a So but hybrid. electric, battery

John Sykes

or are the what fuel-cell okay? impact that kind are positioned enough -- it well that on battery, sales -- have Would Is aftermarket... of saying happen, Okay. is the Yes the guess I all XX tie going this not I'm now in is let's let's of XX% with that say you to the that new car call and from to years just say but does an such business?

Olivier Rabiller

push we more Quite frankly efficiency two, fuel-cell, more The is what three positioned. you the to years. for on than extremely an realized put the can into That's hydrogen can we of well the you efficient Meaning, The the be. fuel-cell is fuel-cell past the better you to the overall more more have can turbo and air the fuel-cell stack. the the are a is charger engine. important side,

design today to our have telling even us we are you So they an just see that stack give to customers the product before idea. want that they

positioned. well extremely are we So

cannot into connected Obviously, light system technology. the charger stack. grease fuel-cell the oil bearing on you the of put to proprietary a there's membranes have We because or

we've specific needed with advantage efficiency. and high-speed that This is us. electric of advantage higher manufacturing, when designing super airfoil-bearing for to combined that motors strong been that you our have technologies for to are want when years to a developing get get We very you -

with we the growth that some the So strong we of think reason traction into are that's and also carmakers that only that got see seeing business, some we why pursuing are lot a not but in I the region. now major --

John Sykes

great. No, I appreciate. right. Okay. a that’s All Thanks lot.

Operator

is question RBC of Instructions] Joseph Capital Please ahead. [Operator next from Markets. Spak The go

A.J. Ribakove

Hi, A.J. one earlier for of the it’s on Ribakove Missed Joe. questions.

to from at -- margin if commentary close perspective sorry, looking asked. just given one-off Or EBITDA, that results. any like the was you in to initiatives XK to factors? the it supposed this was indicated come longer-term were But expected a there previously beat it was come QX So But sizable said?

Alessandro Gili

one-offs all. at No, No.

by but than mentioned that we offset think I was mix negative, as That's the more primary expected in QX. strong productivity reason.

Olivier Rabiller

I report. a -- was know but it question was form your Q we it to concern nothing there understand to have one-off,

A.J. Ribakove

guidance. guidance. but roughly the bridging weakest But end implied high margin call the -- to was of for in last QX it on Commentary the likely then margin year XX% that at and indicated seems the full of at Okay. year EBITDA Thanks.

offset second what So how volumes Or within the benefit increased the may the about cadence cause any And to should guidance that from volume we half? in year? come might initiatives for that think range? in

Alessandro Gili

you No. year indicative should I full take the don't think of QX as performance.

we monitoring we keep reaffirming evolution as the I we before quarter-over-quarter. are think guidance market on said

overall largely stronger We but in is are driven growth, from their remind in the terms gasoline. from tight growth, expecting shift very is gasoline second terms impact half margins keeping that diesel by that to of be to also the to of all which need you

long on the in are still year range. We going the monitoring the for evolution. there. we believe to keep be quarter So We term

Olivier Rabiller

this where volume we we because you are. what and to lower translate to valuable get as obviously, what is said from is achieve the because But you sure the on true was we that that this conversion into parent to had result that is when see important of for in we company, for can a structure cost to macros which us and is wanted beginning the years very the make what --

A.J. Ribakove

Great. my Thanks for taking question.

Operator

today's conference presentation. today for concludes and our call. attending session Thank you today's This question-and-answer

You may now disconnect.

Garrett Motion (GTX) 7 May 192019 Q1 Earnings call transcript