GTX - Earnings call transcript Q2 2022

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Operator

Hello, my name is Michelle Fleischer and I’ll be your operator this morning. I would like to welcome everyone to the Garrett Motion Conference Call. This call is being recorded and the replay will be available later today. After the company’s presentation, there will be a Q&A session. I would now like to hand over the call to Paul Blalock, Garrett’s Vice President of Investor Relations.

Paul Blalock

Michelle. you, Thank and everyone, Good welcome. day, Thank you XXXX Motion’s Quarter the Results joining Conference Garrett Financial Call. Second for

Before we information Motion begin, and I’d along find like to mention SEC our company. are where will filings on links garrettmotion.com, to earnings other that available the our at Garrett important website with you also about release today’s presentation

as Officer; you hand gasoline operate appendix risk release presentation. Securities this within the Executive each to in I statements will contained to only light Chief which measures Officer. Turning manage and us Act. With such. only. filings SEC, to today President found it contains directly measures the today’s Exchange presentation company and with the of and Slide the the Sean that understand most may are estimates those uncertainties using we the forward-looking vehicle President X. and over Olivier. is both and Senior update the of GAAP as diesel slide to future become are and disclaims Vice any diesel be We and The Rabiller, Financial forward-looking our business. reconcile to obligation terms performance measure statements light by Today’s non-GAAP We vehicle Deason, and represent and gasoline our to now the Chief Olivier in aware comparable Garrett’s reconciliations, you’re we encourage Garrett’s includes in of products business and comments, to refer presentation and factors risks note the in these and statements encouraged We the also press way to our read examine which presentation taken Also only today, should forward-looking in that the them. meaning and of to and of expectations the describe management’s

Olivier Rabiller

I to will on Garrett’s we conference highlights second X, begin where with and quarter call. start remarks Slide XXXX quarter. welcome Thanks, everyone Paul, my the for

to that the of our continued Shanghai, to sacrifice great maintain to we and lockdown thank impact able QX, ease China during COVID China were the the through we in to began in During specifically employees experience personal lockdown period. productions where mid-quarter. I again want ultimately

As but the in supply semicon beginning QX. by China, successfully our customers bottleneck restart suppliers shortage by as we series chain to are through customers of successfully to gradual we began our strategies. flexing structure, a cost to our implement QX, The impact experience see navigated also in management continuing inflation we valuable to and while enter supply continued improvements

demand to currents. is and a and by margin QX down level Second above testimony increasing basis by with demonstrating XX%. QX sales of remainder on a year. XXXX from through estimated with compared were our by EBITDA million foreign demand driven constant was as the still to $XXX QX QX stronger and QX, basis, net euro to of million was currency the flat due well adjusted of were of which $XX pass XXXX, approximately volume, $XXX sales mentioned due XXX weaker exchange out considering lowered weakening a of with XX.X% basis exited the the quarter production basis company. EBITDA half mainly points, adjusted QX This X% QX is as recently, and portfolio constant currency inflationary were GAAP $XXX of due global was on the unchanged to unit of was X%, auto by strength a operational notable margins while More lower million to Compared volumes sequentially sequentially virtually above. we remained This as production growth the in to EBITDA pressures. driven ability the down euro products, which million garage for factors dollar last stabilizing

full As range. our driven EBITDA such, euro our we a updating production and and outlook exchange by and foreign adjusted year are weaker midpoint XXXX to maintaining higher rate changes reflect

we to XXXX, are Most production importantly, structure this cash with reduce of while increasing basis remain our while second materialize the While is B which to in unchanged, supply sales us are Garrett’s we redemption keeping volume because means overall constitutive improving for our on to The benefit we to the demand liquidity of and that optimistic unfortunately we outlook our even ready currency constant outlook constraint. of consistently offset the difficult chain weakening ability question times and supply in a additional of for lockdowns for should resulting prepayment shares remain expect half macro of significantly flex cost the the more cautiously All euro. currently position quarter challenges QX I improvement for in some third to needed. if considered seen Series ongoing generate adjusted constraint. outstanding the additional that chain may we why so improve issues strong maintaining leverage in full allowed company. when a all that

results as over capital cash ratio flow debt at represents our from a [indiscernible] X.XX towards flexibility the solid milestone differentiated improving volatile accelerate and net last X.XX And advanced coverage for further strategic In we now Our upside source with Garrett we structure. XXXX expect down XXXX. to work quarter is normalizing substantial on half. second to in the as stands the positions in the we expected environment the reflecting EBITDA deleveraging coupled key year generation with initiatives prospects, second us capitalize financial any This of company the the to in transformation progress continue bring and gross to a train. strong technologies recovery to to anticipated of power that new delivered our QX improve summary,

uses it transition growing power a electrified shell for combustion is solution. X. fact combustion to on of of commitment wide consumed good and of core high our of gasoline those if In business at and train. currency that part consumes business. breadth starting distribution impact HX network demand. the technology growth us, constant the low ICE In aftermarket brand growth growth of margin this advanced turbo our XX% – to engine, internal our the portfolio, increased this of gasoline engine. Combine as win platforms, to boosting obviously our we generate And meaning help now also Slide more constant wells thing are garage are reported in and hybrid with the the requires emission quarter, from Turning XX% to the strong to The to second hydrogen see benefit rate strengths well-positioned in at our of the currency X% hybrids that as it parallel, related the hydrogen turbo

Europe, We pre-development first supporting our across programs for currently their spread ICE a program U.S. over growing Garrett are HX and this will HX as demonstrating with ICE a emerging application. selected awarded we OEMs partner a number XX boosting European the And major OEM. China, as off-highway of

to progress far. of fuel for into In XX% application the now compressor In which addition player page, turbocharging. devoting for Garrett are in cell we fuel that more traditional to production we truck where the or China, are R&D strengthening our on see hydrogen adding systems is is our future XXX kilowatt. core we cell the and sustainable fuel already HX made XXX In picture as regard, a fuel portfolio Gen technology air And in the investment beyond new can schedule X so to we investing also developing were with startup a ranging food of QX, cell major applications XX compressor you business, awarded now in application heavy-duty kilowatt XXXX. a cell have for

the that the rating am in Sean now positive to Garrett A globally more – our in to work on company, portfolio, future. the sustainability carbon we from operate. for sustainability chain CDP a into product the also our will provide to project only we in earned strand recognition the that, supply top driving pleased insights of of I I This progress turn the disclosure it a of global With minus of As sustainable over to but way is not engagement. results. report for

Sean Deason

I on X. welcome, Slide Olivier, will remarks everyone. begin my Thanks, and

upper units. million reported with for at sales net last XXXX six at of the volume hand the QX quarters see $X.X left a graph, you’ll $XXX Looking million on

in was semiconductor volume driven from XX% the year. and due lower of mentioned, in Year-over-year, shortage. also by lower lockdown proportion sales is by to X%. As quarter evidenced the lower to China China last lockdowns of from XX% from falling partial this Asia, QX industry the were impacts The impact the units ongoing

and passthroughs currency constant lower, volume Olivier by were lower mentioned, inflation QX offset was and at As slightly impact sales although as the gasoline turbos. was volume flat growth

$XXX euro. with or of million environment line driven the remained lockdowns, than headwinds page, On and EBITDA adjusted a in solid in EBITDA production affected a side and at adjusted FX the disruptions, of margin result right supply quarters the by hand two volatile China XX.X% strong was chain and last a the better by weaker

the due adverse well robust summary, positive adjusted volume, manage graph, million, even Lastly, cash Garrett’s left to of B solid supply conditions. chain In through redemption free to despite Series showed bottom the on the early Garrett results lower performance with deliver working flow generated as in ability associated and cash as stock. the interest under capital preferred QX challenges the increase operational an of $XX

Turning now to Slide X.

challenges, auto You and category. drove new and the by impact weighed and Despite last QX, on launches of the respectively. share showed ongoing sales for gasoline in impact greater growth the semiconductor gasoline X% demand. inhibiting X% and XX% QX a program sales gasoline and than those enhancing China our products on cycle production In diesel had macro see by growth by is continued and driven of sales product growing year-over-year XX% drop lockdown vehicles net and both year respectively. shortage Growth while our the products China of lower QX bridge lockdowns of aftermarket commercial

continue and demand in new rate of as business than growth expect on share increasing We in win with sustain significant XX% gasoline gasoline a products gains strong more future the products. of technology we to

XX% increase driven sales America primarily Europe. by in North demand aftermarket was highway the and Next, off in

XXXX by the sales some QX measures. overall lockdown from lastly, China headwinds FX weaker due we Euro impacts experience million. the However, to mainly And by did Without impact $XX lowered FX driven impact, a of and and diversified aftermarket demonstrate with benefit and sales last of Garrett’s portfolio were impacts year. products. sales in offset QX the gasoline broad lockdown semiconductor the flat Overall, well the of

now volatile our to COVID-XX of end bridge and when lockdowns Once than was as adjusted higher macro navigated by were combined productivity year both QX on and declined compared X% last with again, demand increasing impact XXXX. commodity, and the margins as last adjusted headwinds to following QX even production passing to well mentioned. of Slide transportation due EBITDA previously year, $XX the pricing improved and adapting million in volumes you spending recovery & through when offset as pressures such pass Turning of Inflation net of X.X successfully volume year, production into X, see million the technology, units million, lowering QX R&D $XX inflationary $XX versus more million. shortage improved $XX before through biggest the to million investment by energy of XXXX of EBITDA productivity last spending schedules, of in increasing semiconductor while increased $X new inflation delivering as Garrett million and R&D. from

negatively adjusted EBITDA impacted points. on was $XX impact FX the which margin basis by million, the XX Lastly,

adjusted driven a So resulting by year-over-year in the when weaker macro lower up in the EBITDA sum headwinds and Euro. decline quarter, volumes you is

Moving now to X. Slide

EBITDA our free to see adjusted for can QX. cash flow adjusted You walk

of sales it cash cash capital as stable side slide, and turnover then of and a volume of to a again, of Garrett’s and million that quarterly volume of see growing will was source XXXX, in periods XXXX QX in declining $XX the increasing use hand on historically right volume. of an basis, the QX was at or QX lag. assuming working capital with XXXX, due of in QX has following QX In of high annual you a working Looking provided a environment

production paid largest from patterns. cash expect for flow and to in the $XX in declining to see of driven adjusted quarter, working interest the as reflecting addition EBITDA cash flow million positive improving just from volumes, redemption $XX free stabilizes see expected, the the with As as left with capital to the environment the cash early absorbing XXXX, the the interest mentioned. normal historical taxes, and cash all second impact the you of Cash capital coming Series half hand will working free course in came bridge million. by improves a expenditures, side for capital of B trends adjusted to adjusted Shifting we line slide, of in

use easing We half in the stabilization in expect result capital Garrett’s of and half, recovered the working production chain first in supply will increase second be of bottlenecks volumes. assuming an

our X.XX B with quarters. three times driven the by of redemptions $XXX debt June. Turning major quarter now $XXX final QX consecutive debt reduction the Net capital the removal in This times the QX B was XXXX to from stock. to preferred million even balance Slide LTM X. of Series and after total with million in We ended structure X.XX of consolidated complete B Series the the to of a XXXX, last redemption coverage Series EBITDA liquidity, over third preferred the fell coverage simplification early of of of

shares we repurchase During program. quarter, $XX the available in previously under leaving A announced equity second million Series capacity our preferred XXX,XXX repurchased

Lastly, our XXXX. continues are shareholders, of have or a milestone once the capital Series consider capital optionality trends preferred cash B demonstrating record is and payment dividend the is Series normalizing A returning the continuation In positive as reinforces returning the leverage, to our important including accelerated Series allocation and cash June recovery Garrett generating the shareholders an confirmed. track to simultaneously of summary, million path additional of industry reduce redemption continue to capital solid to structure. in the And along commitment A of dividend A Series $XXX the capital accumulated to repurchases steps to to XX,

Moving XX. to Slide

XXXX of inventory the poised On the sustained a most their forecast And the years depleted for by page, side related two of shows once have return pent normalizes. we potential macro the production and catch growth both left the industry of considerable show pre-COVID of plus S&P hand end pre-COVID – supply forecast late up to volumes demand up forecast built the environment to bottlenecks is recent auto macro supply light their to how XXXX. and The by vehicles. supply for above

in customer growth program expected hand see gasoline gains for penetration increasing right by turbo side S&P long-term be from turbo engines, creating of tailwind penetration and the further supported a growth Garrett’s by On the secular share will page, of will gasoline forecast on demand turbo rates. resulting strong This you will the our for be the enhanced industry. strong win

positions second substantial year chain reach recently half ease company outlook as supply XXXX, Garrett book macro XXXX. coming these you of realize that coupled growth of first materialize, sustained than them As to performance our when to positions also in combine already summary, the of trends years the business of years. an full greater the with the the improving contracted bottlenecks upper of is Garrett’s Garrett trends industry and growth coming recovers. XX% XXXX in industry for period through with In the It faster clearly in positions half extended half

Slide now XX. Moving to

are the the and Euro, we an a reflect EBITDA weaker previous improving our in environment range to but production outlook midpoint. For full XXXX, maintaining year updating adjusted of

production, is for XX million auto from planning in outlook. our vehicles million global For April our XX assumption up

X% to current estimate now X% currency previous more latest as additional growth plus supply Our net in updated the range to and at plus risks than sales growth mildly it to our constant of X% growth. increases S&P conservative today’s is of estimate range related from our embeds reflect XX%

$XXX previous the $XXX $XXX million. income increases the net to range Additionally, million million to to the to due assumption new slightly increases $XXX and million of from range

prior or €X.XX expect R&D, the Euro, are exchange cadence a $X.XX same FX, to previous for in of half of aligned we For of our to dollar XXXX. €X.XX moving continue from second guidance from our Euro sales to from $X.XX we rate On updating weaker the account X.X% the outlook. with

In revising our to for greater macro summary, Euro, higher to maintaining For this midpoint. a production of metrics you I’d to in appendix adjusted nearest but in our EBITDA presentation. as the in of are the assumptions figure range the point shown weaker these GAAP we detail, each reconciliations

the EBITDA for prior We XX. Turning now adjusted walk Slide our the outlook. outlook versus to revised show

the net Importantly, the an million of outlook, additional adjusted $XX of $X an passthrough energy $XX a product additional inflation the you will following revised volume, XXXX Euro. from weaker with inflation million mix, of EBITDA offset $XXX a and million million an by price $XX greater in $X million additional comparisons million assume both see from two of changes from midpoint range from our

mentioned to on actually unchanged, overall demand and improving important basis, outlook when of Olivier are currency increasing constraints. of weakening supply constant Euro. the benefit our offset guidance As in which that this while keeping The we because for adjusted we is note unfortunately beginning presentation, a it is of chain our are overall

also earlier, noted through we Euro growth production we continue for remarks. In supply offsetting as for to significant light we we constraints which will demand concluding that, vehicles, As pent resolved. result his successfully see up sustained hand chain see believe we inflation. for today’s are Garrett, pass with once now Olivier the to weaker back will I it And outlook, higher in

Olivier Rabiller

you, Sean. Thank

inflation generated and $XXX essentially volume with on XX. delivered XX.X%, $XXX We Slide million QX to sales light solid million flat estimate. estimated unchanged environment. adjusted We margin offsetting maintain vehicle EBITDA currency an lower QX QX FX. global of with last in results outpacing adjusted in successfully EBITDA of year inflationary in of constant at from and XXXX a Garrett Turning solid production net

into XX% of more with new than target investing sales We R&D continue dedicated technology. to to X.X%

while while B Series measures robust million, and production adapting a even have liquidity Series cost bottlenecks mentioned, structure. I’m is $XXX to ease environment the This third solid dynamic the a pleased continuing in completing we put in prepaying execution, by with working of operational strong the second the faster strong in inflation, the the consecutive reduce half performance Overall, for see had capital redemption Obviously, debt after QX. in place that and quarter of XXXX. leading very to final the $XXX Garrett total cash address our continue repayment B therefore the if should supply second valuable improving generation trends strong full demonstrates volume we maintaining we million As to very half, of flexing recovery to chain the effectiveness

their fact, In constant I unfortunately are residency volatile actually in their weaker again, quarter Garrett. and basis, like drove for the we dedication raised performance environment, Operator, which as benefits the Q&A being guidance, and very to discussed by of now have we another Sean of session. on for our a I a think offset that once currency contribution start ready strong are successful employees to flexibility would Euro. thank

Operator

Instructions] comes now [Operator from Our first Your is [indiscernible] line question open.

Unidentified Analyst

you can us? hear Hi, Hello?

Olivier Rabiller

you. can We hear

Brian Sponheimer

Funds, Gabelli for from about as a seen Can Sponheimer ability thanks mentioned you or that not Brian when to of next far the holders sell repurchase a you you the I’m Any can year? from A taking you’ve of redeem as the to that. reporter some can of ahead Series little some event, the redeem and is potentially This I bit when talk Sean, question. the activity ask you of looking Factset. of that ahead curious,

Sean Deason

of the shares I the So can’t dictated But the parameters individual the the in really activity on Series A, and market but within liquidity availability we’re comment to that. the on in by obviously of trying terms repurchase market.

repurchase on think place. obviously, We so in choose, in – we but are block the half. industry we we if stabilization need we sales can recovery focus really to the do I second program have and And a

to increasing we half more second and thought redemption the it’ll And very said, give I additional right stabilization very in we’re we down And our optionality. of decision. the really recovery as seeing forward, very, working September. hopeful in flow. our capital structure. that in milestone a then We’re materialize It’s capital volumes, the with will Series We was and the us But particular some through important see EBITDA normalize B. flow cash generation the to about look that as pleased it’s how things as

Brian Sponheimer

a could what appreciate production Apart it in it China, as else are back it the – ahead speed see Ukraine? I levels as that to Is you from markets? that. or Is far chips? as that bumps three do normalized market maybe the little anything Is bit lie are there that your more two understanding? isn’t specific maybe getting

Olivier Rabiller

the fearing, you little remember industry. So customers. much a – is lockdowns. The the China little seeing say happened increasing, the was last shutdown about be a early speaking. has to was everybody far are automotive on impact. the was that about, year, the supply in will are the potential to in of still latest that some in from the consequences the has of thing for we elements [indiscernible] is Europe worried bit of if this well ones QX, uncertainty I the if by is I not of on This that. that few as only months. understand in I an programs of I’m energy chain be consequences manage I so volumes would to than have Olivier because guess, thinks materialized the it’s obviously semicon for so China able bit the far even worried of stabilization beginning next. there of recovering it should extent I was too lockdown as shown shortage But end especially by that Because China better, less situation far, that

before was quite frankly, demand strong unique by now it driven it’s stabilization by the that’s and of still up and production, pent seen automotive that’s that fact driven we’ve a the something turning there demand, never market overall, So is the in that mean a before, today, situation. demand I

Brian Sponheimer

of luck an color. half. for excellent and the appreciate second Thanks I best

Olivier Rabiller

sure. Yes,

Operator

moment for please next question. our One

Please question McIntyre McIntyre Partnerships. go next Chris Our with from ahead. comes

Chris McIntyre

Hey guys, is the sound working?

Olivier Rabiller

Yes.

Chris McIntyre

Yes. Good, good.

first if back don’t the little in slides, where know the a you half? missed on overall but down… bit it trending And about commercial in can on was mix I in how you Just the the talk where half it commercial, was or much it I see

Sean Deason

it’s Yeah, down.

We’re second on the we gasoline diesel do we vehicle. see commercial see to what recovery we’re commercial if And by second engines and – to primarily half, mid-standpoint down a particular, be actually but driven didn’t with smaller flattish. guide the we going see half, volume but commercial from in then hopefully the in we that’s staying

Chris McIntyre

Okay. years Got that customer your like, remind about And over been XX ago right. three how were talking me it. All win you like then you’ve rates, and talking you’re about is right? over XX%,

Olivier Rabiller

are XX% We about talking over XX%.

Chris McIntyre

Yes. a previously how XX, performance, to for get right, I about thinking, But quite trying just over you been let’s talking to and XXXbps, have you was say, well. guided like are above sense you’ve done market to XXX guys historically

And so current you a was should kind out be thinking, years? thinking projected moved Is win it about of thinking rates where like, over that your range time I couple are or… up

Olivier Rabiller

XX%. think we said we over very are rate pleased with I have, win the we

demand we demand. that know growth rate have increasing. are And are we think some level, we exactly programs some formulas winning our no is are to But at in have. you shown that increasing considerations, cell from we’ve our it’s that longer because we life. program there, Because industry cell programs in direct level, in that know, by this that said also there win that bigger a the you demand see some adding cell there QX. I that we we’re this what as the they give at materialize the other consistently some difficult smaller, – direct impact is a all all, on And when would

monitoring to us it’s the translating we for closely. stay a why what future. in demand are or that we On it expect that’s is as that I to, - it, increase flat Chris which pleased to expecting cell the we are that one very you better, of to not seeing little And final primary sort say, are then into us, that but forward. point And numbers, about So and number keep we and seeing above trendto R&D, bit Q enables X% the try McIntyre going great. – very XX% our with ramp got of comparison, it’s we Okay, to change think it’s closer you should question.

Olivier Rabiller

currently. Well, today, quite with we we think are happy I are where

amount you certain only function We intensity have have that the trim because of not the good car need not less of advance but do we we’ve car we that keep growing. a RD&E RD&E any percentage, Without a push you by of down is increase we going the effort company, what way, less business. of as new for industry, that that this spend bigger sacrificing business. the on vectors, benefiting, is our a more do volume, and is day, the turbo And of or money are business is RD&E significant in we on the our enough bigger. core things car down as to from develop intensity RD&E, RD&E of want programs much in business, we because new is spend the revenue any car getting seen engine so trend, That’s to even is are since that the the a enabled the you increase the importantly is we spend to and that at you this has in of of just what can on business. driven outside programs, add of the it’s on very specific for for the company growth you result, the important percentage, RD&E And therefore, we to And number partly programs before, certain get, channel the which is the quite the of to end us the if do, which frankly, revenue if to said it’s us is do really the you add of as slight decrease mind. more

are mean, decrease planning not we efforts industry, is are down. I ours industry, a the turbo planning great to We this and

Unidentified Analyst

operator? Thanks. Can Okay, have we great. – we the do

Operator

there. issue I And comes now do Financial. an with was There apologize. next [Operator BWS from Hamed our question I Instructions] apologize.

Your line open. is

Hamed Khorsand

good Hi, morning.

off wanted was just or ramp start up there business inventory production the – up was doing how that in the with return China. have able Were built with and demand So of start meet you that to in already to much production cost ramping so? did you to or

Olivier Rabiller

That’s question, employees for able maintain fact the of lockdown. portion What has a – into have been done in we been our great factory significant entire in we’ve Shanghai the a Hamed. to

high during lockdown. the entire a we’ve been quite producing the So of rate to site of at compared the capacity

did not from there. lockdown was have At more there time, the volume. trade. start producing the Shanghai we than the So at team term volume a the kept position Yuan you if XX% lockdown same only in of of we look as a represents what on China in do We can we cold easy during

is So when at end, were the as the lockdown running. we already

rely emergency were explain, again. – not So cost mean on lockdown. not imagine, you the not very of restart have did we cost, that all start had lockdown, we like the inventory had relying to not months inventory we operations friction big to it’s organizing a for as shipments part as can did up few on we a would’ve dangerous but super I we been two And

Hamed Khorsand

slides, you’re on Okay. as that your pricing sales XXXX predetermined a as – basis that the or and is unit? concerned, about contracted And XXXX, capacity revenue is then per are far XXXX, for talking

Sean Deason

of certain volume. we because business comes The the comes is of with volume this are and that volume. all set is, we’re If that quoted, that, point the that really, back, And online. we business. the the associated about it’s won the the business – and industry No, revenues XX% prices booked

Olivier Rabiller

for keep to So we four important five our you is years there something that out, tend very five to mind look with that years, at Garrett something in revenue when forecast we is years be explained out. consistent

We contracted. the the oil have top. two-third and on business then That add aftermarket of you business, can is

that parameters which at Once won a when rewarded rebidded [ph], have customers. it’s with four So really real look matches we is price and years then with ahead, a business, in you XX% like which defined. and the base excess the of the at are business

we get in and industry customers. like unknown. of sometime not macros into it’s of is model potentially The the this the – unknown the our impact not is there only success the we So have

can preset, on those uncertainty have a valuable the macroeconomic the of On a being where so the spending mean, many high set range part that’s of is that’s that’s the forecast run, position that the in we’re as reason you company, so is I valuation. us the cost company contracts, long long volume very all rest which driven macros keeping we’re volume by puts can visibility only in we but as and efforts and a the you as at absorb fixed possible, the way as why best the that

Hamed Khorsand

turning the we’ve with for prepared prepared you now macros a are any And do about it’s the suggest, you that are just how up chain, think into what showing uncertainty supply talk consumer forward, not the but could create. the – for that how the demand, macro seen as variability you given you could the and question, if and to of as and OEMs of industry much reports kind estimate more as look well demand

Olivier Rabiller

because the macros. all, that sorry. has driven we First industry, with that people demand is are the is What pushing supply see usually it customers changing where constrained pushing were this buying. eyes buying sense This not we who start – production of driven, on are our automotive or customer In today side. sales let’s cars buying in are sales, market been and

the in car customers have deck, years, over we of XX are graph number vechicle the accumulated enormous million forecast to regular amount world as production low XX says we two a whatever around million as that showing small add between and is And year. we’ve been But XX So last pent-up an million units. XX of on demand light basis the in buying this the year million produce. the the makers to XX the last our units Slide XX on because are million able is XXXX,

about a up constraint never this between gap that you the supply able million, it to long of constraint time. amount mid-XXXX, constraint specific that our is into industry since massive and what getting stay have situation – will that was accumulated needs industry been to supply for the at XXXX, semicon we will know industry automotive customers very pent-up supply. to ease the if to And compare that which before So the not into has demand, means point XX we a to least of

are of we more demand to now, the we today, I customer And volume supply we So way at real would’ve at past, one. this future look are looking as very constraints. a and of specific the we only that are into the not thinking the at mean we looked the that right industry. position being are in

you that’s three enough the otherwise two, impact backlog last what demand that it reduce So supply or even could use that’s accumulated has years. not for by been if X%, the to

crashing, not impacting scenario So the is economy. there but the at, rest potentially everything’s crisis looking at of we the if and is are are looking even frankly, the industry we that’s change if quite a automotive that’s a obviously stronger,

Hamed Khorsand

Okay. Thank you.

Operator

today’s more questions. call. participating. At conference for this This no time, concludes there are Thank you

now may You disconnect.

Garrett Motion (GTX) 28 Jul 222022 Q2 Earnings call transcript