BWA - Earnings call transcript Q1 2024

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Operator

Good morning. My name is Britney, and I will be your conference facilitator. At this time, I would like to welcome everyone to the BorgWarner 2024 First Quarter Results Conference Call. [Operator Instructions]

I would now like to turn the call over to Patrick Nolan, Vice President of Relations. Mr. your begin may you conference. Nolan,

Patrick Nolan

our Good Thank for and for we Relations this Events on and and both on you our Investor everyone, us you, full home morning. earnings our today. page our a calendar, posted earlier Investor Britney. joining release We thank earnings borgwarner.com, morning, issued release. page. home section multiple home attending Please at website Relations It's on our to be With the of next Investor our conferences page regard see Relations will between list. now our

begin, forward-looking you that statements, we XX-K. as joining make risks need involve our may uncertainties and we Before to which detailed I this inform in call,

discussed Our actual today. results may differ matters the significantly from

non-GAAP for other comparison you that on of the M&A. means we'll net impact order of noncomparable hear a organic, FX, that During say of that say FX in comparable picture clearer and us of In items. excluding certain When to items. purposes excluding and the a hear noncomparable M&A excluding impact means today's core performed adjusted, us basis, hearsay how you presentation, measures the prior periods. business and net When the provide highlight means

our margin We will also refer to incremental performance.

as Our our adjusted incremental the change organic in defined margin sales. our operating organic is in the income change divided by

our other includes in on ER&D, investment incremental planned cost items. and all inflationary Our any impacts impact net

IR along Please encourage our the we of hear We slides weighted in you today's production we note say our Lastly, light growth discussion. these our means exposure. during to website. to call to presentation posted our When refer to change that geographic follow the earnings for us market. with page compared market, that our you and

call Fred. the to With turn over happy to that, I'm

Frederic Lissalde

approximately X. a quarter Thank update, close organic for everyone. sales, we provide on overall Slide $X first delivered to and in results modest an the company an good I'm allowed to industry starting XXXX despite the it the us our Pat, of QX billion to day, With on margin. in incremental and a delivered pleased well to share very quarter X% start in and you, we performance which X.X% achieve basis, This believe our quarter a year on We positions nice us year, strong performance to guidance. decline. the full deliver provides all-in growth

the closely continue once These secured we steps We awards. support take the with create offerings value And eProduct our multiple will discuss, to they to our longer vehicles. again customers electrified Additionally, awards to in for to we as I our working as for our expand leading-edge new technology, towards on taking help demonstrate continued product quarter focus electrification. shareholders. transition them

of repurchasing million stock authorization $XXX We capital deployment the focused highlight, Craig our an quarter, million of efficient by Board $XXX as our on during Directors. share will repurchase of of from received first we the increased

Now, let's on product Slide new award at X. look some

are customers enhanced density, These additional volts which offers Shell comprised efficiency and of XXHXXX models. BorgWarner's for BorgWarner rotor and use Start X XXX eMotor of First, superior state high on awards planned systems SUV e-motor production for Pang. include award durability. to occurring secured e-motor is with XXXX. components, BorgWarner's

eMotor business and to our them. partnership thrilled are strong on with our We extend with Xpeng build

later production is ETVD OEM their disconnect currently vehicles, OEM, X-star sub highlight is SUV like BorgWarner production European vehicles. battery begin in expected electric would additional which in and talk our and the X European for to for major EVD. the for with Polestar Next, secured new ETVD XXXX. product major to electrified a or new an business vectoring I electric line awards is for

ETVD an in BorgWarner's a in traction electric is on-demand replacing added offers improves Systems ETVD and lighter a and system often towards safety. feel and enabling reduced an portfolio weight and to hybrids. ability. overcome both needs talk safety system, and applying and develop our vehicles solution helps X-in-X great functionality to vectoring foundational The application. they part increasing the innovative agility and and electrified electrical which improve this The traction, which helps hybrids of by The is battery performance. vehicles our featuring a differential management for example customers' BorgWarner of capabilities transition address expertise ETVD disconnect as results

moments Now the you Slide our portfolio remind of foundational I few want to on to take strength X. a of

$XXX for approximately it's First, combustion opportunity on basis. important average content which global estimated vehicle, to is a BorgWarner's highlight

that content major I highest X regions by this that North we in opportunity note opportunity our region. America varies in. of operate the out You'll content the would point is

extent BorgWarner. vehicles cash North a So in have a that to and for longer the could combustion provide margin positive that America, flow tail sales, tailwind

in penetration happen. to the enablers in compared in see billion. combustion I of the to to potential revenue may vehicles efficiency, few. remaining add just as region a to continue XX% for opportunities If national about we and the EV XX% in to America, XX% penetration Europe opportunities make of $XX North continue to also In like would see We need Turbo our about one biggest American and a is XXXX Turbo, slows China. portfolio, penetration growth North list challenging across which this is improve growth

higher see EGR penetration For combustion-only vehicles internal of EGR the cooling engine opportunities steadier combustion in is operates hybrid we as and on business, state. hybrid architectures. The than benefit traditional a and our efficiency

system timing its to the timing hybrids in due and Our technology EVs also sees hybrids those durability strength. penetration engine is superior opportunities plug-in in preferred business and range-extended chain as

businesses. our value benefiting a these of vehicles means the and combustion cash longer vehicles. potential drive Southeast strong see opportunities, for while business on Maximizing score at maintaining And in the on same from Asia capitalizing from American and all-wheel of finally, products penetration foundational we North our tail growth time, these profiles margin the

take turn Slide X let's back. to Now a step and

the for our or hybrid left various combustion, leadership of are scenarios. slide, believe on best these has eProduct decades of in we under Starting are growth how foundational BorgWarner portfolio, fields. growth or our discuss combustion in Let's product the foundational with positioned portfolios and experience top which

We products #X and have critically important customers the customers consolidate share our supply industry base is around them. these or support as technology support the have strength look their long-term can a and to leadership potentially leaders #X This for that globe. market and to financial

our this the This side Let's jump M&A page portfolio. past see breadth eProduct of has to the grown portfolio of organically the over through you years. where several right

scale us This our cooler our portfolio share multiple have our built enable establish We We technology-focused will customers' grid has EVs leadership in and of in secure to including product meters and inverters, a allowed supports technological us continue e-motors, leadership new to that portfolio, from areas needs that to systematically to wheel. business. expect differentiation, high-voltage

hybrid combustion our simply, eProduct portfolios both hybrid are both doing propulsion Quite as the which customers as already since vehicle foundational and expertise downside We China. needs Europe support successfully portfolio of to an the well electric powertrain. engine our we support and our in can utilize in

BorgWarner positioned for when regional manufacturing scenarios, successful well resources, actual the sell lines to are even specificities. believe beds utilize we're utilized combustion and and design, footprint to We able Importantly, hybrid including various applications, under be is product vehicles. products sometimes modular electrification same that engineering we for adoption

an levels above-market regardless for product built been this environment, varying of of has propulsion electrified focus on achieving growth type Our of purposefully adoption.

is Our to teens an on into basis. income growth high at to mid- focus convert level the all-in

strong. To results today quarter are takeaways were summarize, the from this: first BorgWarner's

increased quarter, strong we mid- once high comes us on that Our from. to on teens We in wherever delivered the the portfolio of we our conversion outperformed again that product new from and focused authorization Board. basis. all-in first our sales our we and industry growth our leadership convert further efficient multiple quarter which powertrains, a shareholders demonstrate we And We secured eProduct to awards believe revenue the position. to have repurchases resilient share through continue products allows incremental and an

expect our our We necessary take As growth. to long-term manage holistically. plan business while to continuing preserve to to our forward, we we costs profitable manage to continue the steps look

control through strategy on converting that cannot following a all-in balanced an and product creates earnings near-term can the the BorgWarner we our sales long-term value -- volatility driving across in that mix technology-focused focus on allocation capital growth into basis growth levers production market shareholders. we While propulsion globe, above for

over the I Craig. call will to turn that, With

Craig Aaron

Thank and good you, Fred, everyone. morning,

I I'd first dive the our like overview Before financials, into to a of provide quarter quick results.

growth First, a we to X% in reported industry organic close volume. decline modest sales despite

performance, was led on over on margin incremental conversion as by an well which driven a had costs. we This managing appropriately XX% solid of conversion our year-over-year strong as higher basis. to all-in Second, revenue

continuing from our at for to $X.X QX for walk Slide sales under operations year's X look Now, QX. let's was turn year-over-year million. Last sales just a

can decrease dollar our in China see drove year-over-year strengthening the [indiscernible] $XX that the was Then in and can sales almost year-over-year of which growth you increase driven Europe. organic see or in X% up sales roughly You by in U.S. a million.

Finally, added year-over-year. $XX sales million and the to acquisitions Eldor of SSE

just of was QX. million this Some in of all under $X.X sales

XX. Slide to Turning

flow the our You see can performance earnings and for cash quarter.

incremental million $XX of $XX That and $XXX first on adjusted from to higher ago. basis, of excluding The was margin a That the increased impact a XX%, income margin our to exchange million or operating compares year-over-year drag Our driven $XXX operating adjusted continuing all-in roughly net of year higher quarter income On foreign a year-over-year. strong adjusted was operating sales impact to comparable operations a income sales. million X% M&A X.X% million by an income $XXX from of million, on controls. cost margin. and operating a equating of translates M&A,

a the compared flow adjusted effective free share ago operations impact continuing quarter, a decline collections as of our count. EPS operations to adjusted $XXX ago year timing the ] And the and of share was was [ continuing which operating timing on income, our our impacted year well the performance finally, from was usage rate payments. a higher tax of cash capital Easter of $X.XX was repurchases than working as our by as a a of recent result to in million customer tax during holiday up higher due from Our the usage first a as

outlook with foreign currencies. Now our at XX. year Starting Slide full take let's on look a

also $XXX of the to with guidance now largest the is This sales full guidance RMB the headwind million from versus drivers $XXX a our currencies Korean headwind expected of compared XXXX. prior sales million and our an change weaker in Chinese of being Our outlook. assumes foreign year

Next, to full driven we end This Within of of guidance market expect X%. compared year by X% this first to our prior assumptions the to unchanged. increase strong X% led approximately sales X.X% is growth to our quarter. growth in organic year-over-year is X% predominantly guidance, down

eProduct billion $X.X continue which significantly we to billion sales, Additionally, expect $X.X to in deliver between $X XXXX. approximately is to up billion from

billion and in our FX total Eldor acquisitions range are the on Based SSC we're these XXXX headwinds. XXXX $XX.X line which sales. to approximately expected the the in of sales $XX.X Finally, to to add with $XX projecting despite million billion, is guidance prior additional expectations,

Now let's margin. to switch

margin year in of our expect full X.X% to adjusted continue We range operating X.X%. to to be the

share. impact higher business of on on content on delivering of our the our the high we're all-in count a costs. of $X.XX, incrementals our full XXXX, conversion and full full EPS year focus this believe prior range related We teens impact increase to outlook our tax the Eldor and Excluding repurchases margin compared prior power compared losses strong company margin of outlook also to being the guidance. managing This to underlying and in to driven is and basis. delivering in performance reduction outlook, sales Based diluted our by reflects appropriately year expecting earnings $X.XX on our share rate mid- this share per adjusted outlook sales an year in our in

Turning to cash flow. free

flow we'll to cash that $XXX for of million expect to million year. $XXX continue the We deliver full free

turn to repose Let's increased XX recently our Slide discuss share and authorization.

opening his share approximately the quarter. XXXX repurchases in million million. our first we to repurchased stock BorgWarner highlighted since Fred remarks, brings in $XXX during This As approximately $XXX

in repurchase increase When years. up to our combined $XXX our million our next addition, X repurchase of prior management to authorization, million remaining authorization under the Board of ability outstanding the over the million shares. of $XXX share Directors an to up In with company's has approved $XXX the

since have about dividends share XXXX. also highlighted, million In shareholders just $XXX we repurchases of in the addition to to returned the start I

capital additional the completed this which also XXXX, shareholders investing spin-off the to roughly of roughly We has BorgWarner in Affinion, future. $X.X of returned tax-free distributed billion billion capital all Adding shareholders. to while company's $X.X together, also since

demonstrates a the over of shareholders return business balanced in share also maximizing several shareholder commitment is investing our the approach past and been underlying another is balanced $XXX to increase that our of allocation ability strength area million capital capital the importance significant in our of allocation shareholders value. company on of focused of capital example return capital the Our a towards has years. focus to authorization the a We The to while believe simply repurchase approach.

first a let So me remarks. financial Overall, quarter. my solid we summarize delivered

Our conversion delivered this on expectations. strong importantly, revenue And we growth growth was ahead basis. our revenue an of all-in on

goals As this as and remainder how BorgWarner think about for share is I key to first the for my of CFO, financial BorgWarner's call wanted beyond. I XXXX the

to basis; hybrid third, growth second, in the first, drive deliver As we markets; performance global an and despite margin all-in to support a returning expect move to organic inorganic forward, make long-term incremental company generates shareholders and dividend and BEV I strong quarterly growth consistent volatility profitable and the on strong company operating organic repurchases. our while allows flow also the to opportunistic share through cash investments that capital

come. goals these create at for years shareholders long-term towards how value hope to for our we Executing we measure and is to how financial BorgWarner, success

the I'd call to to turn With Pat. like over that, back

Patrick Nolan

Britney, . questions. open Thank for ready up we're you, Craig. to

Operator

Instructions] first Fargo. comes question with Colin Your from Langan [Operator Wells

Colin Langan

strong very over here, X% something Started market off QX. I like think, growth in

guidance. be growth year seem full of But and wouldn't midpoint margins in nature we we about be moderate your the as of the year maybe sort thinking to we a thinking any a things QX results? actually midpoint, market, reasons anything guide be that change. bit bit but margins the kind in for of through Your the is boosted the of at the implied of should about then onetime in And sort should of moderating year? rest the go

Frederic Lissalde

the really performance in for strong job. quarter. Colin, They the operational did was exceptional Nothing just our It business units. Thanks, question. an for a

remainder on our quite implies We the low good end. on about about year feel quarter really XX% end, sets guide, the full think up a for we just the We're second of you really to towards It's going performance XX% it company. XX% for As the on that XX% conversion, and year. term, us doing into a well incremental first we're performance our good near high to the executing the quarter. keep the just focused as operational

Colin Langan

And rules little EV pretty of quite helpful. sounds that you content Maybe talk today the about in there? there, change your yet, guess, to The interest sales have good. more be That any bug was could much a your favorable you Okay. towards It EPA opportunity. in I seem seen how are early on given PHEV?

Frederic Lissalde

Colin, PHEV given have coming don't foundational of hybrid also plugging products our most coming the I content. one the in. architecture we our eProducts our and is per have where granularity we that think into is of which hybrids. about those -- this hybrid for $X.X is eProduct, our the But Range XX% extending plug-in guided hybrid going billion the full year vehicle at light midpoint overall hybrid, EV, and at of in

Colin Langan

it have just any PHEV interest early? And seen is too it. improve? Or in still you Got

Frederic Lissalde

been Quest interest always the fair I bit the -- But of we it's and of would energy our PHEV hybrids U.S., the globally, of quotes vehicles U.S., of are advanced hybrids part from In share early there. and So for that outside have plug-in OEMs. those. some to American the little a say new of see has

Operator

of Bank America. with Murphy John from comes question next Your

John Murphy

is the XX% moment I I not you're is that Is that seeing necessarily, -- you that hybrids new at schedules you're just wanted mentioned on on provide any seeing question eProducts there you're of moment? might but to in the for follow said know schedules there? that Colin hybrid seeing step-up up upside asked on some increase the for you side, hybrids any hybrid there is at in that activity billion the $X the and any

Frederic Lissalde

faster over upticks Yes. you China we energy of In are the look of Actually, hybrids China, see months. than and few in in growing growth share if that actually, hybrids. past Europe, new vehicle the in at

we're and those. of -- So part

to on too answer is, say. in And question a early basis, your the North America, global to So it's yes.

John Murphy

and back as pull about such mean in than whether pace, thought. than capital maybe a on direction, push it the you U.S. think cut have so may some doing to can stalling, that on do a CapEx reality more slightly is do sort maybe best is side then you to on costs your debate service China particularly less of There's in investment, here Europe there's the try long much the really there's as whether I'm it's second as China as of whether have it might a I and and add are Europe down and just clients EVs. short it's can't nothing spend it term, and we you term a the you you possible. you And customers, that measured But capacity be at about or in ability your comment side? in or heading on what can you -- just to back on or because curious, -- keep the you also it's and whether then question. your side, could pull And really the invested R&D the R&D other maybe you think Okay.

Frederic Lissalde

Yes.

costs We holistically the our in with are managing current line outlook. sales

I player. our a to in incremental As the Craig a setting where would box comes mid- is into remarks, not BorgWarner say to high the up matter or combustion no and What convert or company we hybrid player prepared I mentioned try revenue are teens to from. player

to high We to And in scale teens on in are having no order are mid- we those all efficient what. matter now powertrain. convert focused architectures

John Murphy

more a in I you be certainly that Or is side, way you box into any capacity the a possible? where didn't That's direction tech the company powertrain is boxed to would the capital one put or a efficient? on bit mean across potentially there board. little And other. to And

Frederic Lissalde

a in actually facility -- think same same products to the in sometimes for the the standpoint, prepared engineering, We remarks, the sometimes some flexible we're of the I product. equipment, from production have alluded a I same that

you about inside from about perspective, all we've those They dual same the the past the might of inverters the things inverters similar. Let not same And those guts me bets. for the for few talked are talked are form give and an exactly All space example. of We've look a hybrids. but years of

difficult program. both we're a bags elements flexible quite in different it's specific But across to hybrids. without So all and overall, answer that go

Operator

question Your next Levy Barclays. comes from Dan with

Dan Levy

the assume, could you could what just in Maybe of just foundational? between foundational, please? revenue out market. was Maybe I of is up and pretty driving you And break about some quarter, eProducts still putting split dynamics the that, the growth the talk solid of then

Craig Aaron

Yes.

So million foundational. breakout $XXX Dan, and was of your million, The in a I'm $XXX other just question the little eProducts. the the eProducts quarter? sorry, foundational rest growth was over about quarter was And in

Dan Levy

Yes.

Within the were of or for foundational over have what the growth regions what of products market, and sense driving market that? growth the do a you was

Craig Aaron

Yes.

well product would say the growth that the on as the overall, you of growth business. in So both that the I the business China of Europe. foundational as was the includes side new both side And in and saw

Dan Levy

outgrowth the on foundational one? And any where was that within sense

Craig Aaron

our it business. side You the can drivetrain lot of see in a of

Dan Levy

across business. simply some that is sense less you've because engineering, the margins. that then you've maybe within contribution a know second foundational. versus getting between sense us aiming high higher eProduct leveraging, the that teens possible And But a in incrementals on you split you're incurred I there incremental there's of could margin product, if just whether question are it that And mid- for foundational Great. noted to is actually are more give seeing that margin application R&D you less we a

Frederic Lissalde

that and the that lines to that And collection say high time we mid- taking so to teens. would deliver in costs product those over balancing all all I being incrementals. are those able are we're business to order get taking holistically to

Operator

comes with Noah Kaye question Next from Oppenheimer.

Noah Kaye

in kind off of deployable repurchases that the Craig, trading we And the think around million, done of cash say intrinsic the the leads after based value. $XXX you've and below for shares flow I year-to-date, are guide me $XXX would free dividend year. certainly million

opportunistic? year? how ratable? about buybacks this you Is are pace So of of you more going the rest the for Or thinking be to the are remaining

Craig Aaron

question, for Thanks Yes. Noah. the

We want So back. last a I $XXX company's of over just million shares take X the step to the quarters. repurchased

first So up in year. $XXX Directors. to little -- year. and of about this quarter Obviously, to our going a QX we over $XXX last authorization, with did of say the capital We pleased I'd to approach the just million in quarter total we got We're a takes fourth $XXX additional holistic of as we it. that Board we in authorization continue our to like QX. million. in opportunistically, repurchase just allocation, million like did take think

to look have at at off. look So we buybacks We on at a we we as that fixed stock as lever want look leverage. a and is at Obviously, We for M&A you as don't We mentioned, look liquidity. well. And turn funding short-term that needed. a that's dividend there any turn obligation. that's

it, move should I about opportunistically. about as That's it. how think do think to So and we'll forward, continue it think we

Noah Kaye

sales the in good Okay. the quarter. on eProduct to housekeeping Helpful. first get And then

ratable help really quarter? of really fairly over XQ Can it the guideposts the you're about around of the us cadence for have guide give some of I even how for coming -- us battery. Just the any course Is But the ramp? know how particular can you but the think a through -- getting midpoint should is capacity or year? to some ramp? to you proceed this weighted just online thinking XQ, ramp have year you

Frederic Lissalde

in Yes. in of in you're for others. in and segment, the the battery Seneca QX, ePropulsion launching with numerous areas quarter, Europe. with we're this year is later We're launching line and And XX%, went revenue other year. XX% up year our [indiscernible] to in eProducts. in programs the our We're our with full capacity products in right, ramping our back up next Group BYD XX% of VW Noah, so in outlook

to So it's next quarters. you're going the over right, increase

Operator

comes question UBS. next Your from Joe with Spak

Joseph Spak

with touched you a sort other on I core can little technology comments, of talked also you about plug-ins sort of and your already Fred, Q&A. that in BorgWarner to bit would of what's least presumably, customers know turbos In sort do have some to need your But take transition. help at engineering, seemingly it's powertrain choppy of increasingly going and greater to sort a adoption. an time

what sort quickly So are adoption the customers there? of on we core traditional can some of the like the what's of -- really conversations greater foundational how levels products? And potentially see

Frederic Lissalde

Joe, and thinking North question, guess And about you? are I you were America your

Joseph Spak

Yes, yes, yes.

Frederic Lissalde

the Okay. I Yes, they blocks from I early alluded the because happening, feel of it's support here still want into those to world, think to I hybrids. in to little need it's cities, all rest also the they BorgWarner. our a the specific North before, customers to that we as in get the have have America right? as advanced building bit

phases of We early are about the discussions architecture. in

time. bit I So think going a little to it's take more

Joseph Spak

And Craig, of sort job obviously, great the incrementals. managing to

continuing You that. manage about talked to to

certainly, I to trajectory curious mid- is pricing that? a but the but that. lubrication, side, of you think maybe year just some of some an on go the Or still to R&D things side, is volumes next pricing probably don't year certain the not to product on there opportunity think Is on towards it's there actions. within what's or continue you opportunity not past, if push volatility as if opportunity an the programs on foundational to in there about lot for -- But about even locked, of of this hit stuff a I'm thresholds? because given the sort right, talked you some other long-term restructuring the a look

Frederic Lissalde

may incremental, that. you our at that have satisfied Joe, segment XX% about is running we're seen not ePropulsion and with

now. we at some we'll looking that to the And we're we what is going. steps it adjust to to wherever are this doing the And strategy So again, performance. wherever improve costs necessary, is market and right is have a margin take

Joseph Spak

decrementals, guess, I in the battery One follow-up on in stuff -- the is well, I eProducts. guess not

So never mind question. correct

Operator

Douglas with next Your comes question ISI. from Evercore

Unknown Analyst

and then here XXXX? the follow-up. compares one that same orders recognized And revenue your group quick Can those from the how a of maybe anticipated to that us for percentage domestics? you of tell from percentage Just Chinese one

Frederic Lissalde

You're talking about eProducts?

Unknown Analyst

Correct, yes.

Frederic Lissalde

for for vehicle XX% eProducts is of $X.X in on the about for China. that, is Chinese the Within OEMs. XXXX, So billion light XX%

Unknown Analyst

granular you in Okay. a exposure the those quantify Great. growers BYD's to some have the world? can you China, maybe And more note, then newer Xpengs, the just of on of Xiaomis

Frederic Lissalde

can't unfortunately those I particular. of some names, those can't with have product I and we disclose in names which disclose

not So can't. I just love I but to do it, would that

Operator

with question comes next Your Sandler. Potter from Alex Piper

Alex Potter

Great.

world maybe toward moving see first, architectures its own evolve? question companies their I'm way different your China So the as with China a that the doing can maybe of more market thing? of China the will following way eventually has or foreshadowing which in regarding been degree in on Obviously, you I world guess, opinion quickly and a from much the harbinger China will here evolve. of new represents China. There's you electrification. interested serve regarding world that the Or in, to rest rest of the dynamism the sort the Do trending the are directions of those markets of doing those that pursuing. lot the that thing think own do rest

Frederic Lissalde

essentially That our within in ratio hybrids In China. of hybrids, fastest segment. the also will is segment of umbrella the are see And XX% and eProducts energy you that about advanced -- or that new vehicle, shares growing hybrids China, eProducts that within within faster versus growing actually under the having devs.

matter. kind For of doesn't us, but matter, I say doesn't wouldn't it it that

to right portfolio were the not support we have globe. attached customers And product to We the regional around any specificities.

beds. propulsion any to resilient scenarios are through hybrids or We combustion,

you of But propulsion -- I So a basis a good we're those world. you, the on China a support electrified won't can we to don't will not I is see that crystal a of I for rest proxy global believe and I'm the tell variety have ball. architecture, ready

Alex Potter

downward of Have OEMs. of one production you'd market April, to tactical back of peers versus Yes. at in over and real but question, the anything seen adjustments production that half other volatility Maybe couple your I say the schedules another last be Okay. on would month clear. schedules overall weeks a know regarding Very more or that? several be morning, your near to some or to near-term this the last anything weeks of question particularly willing helpful. similar Good. you the noted quarter, generally haven't term projections changed call

Frederic Lissalde

overall the IHS. the view Yes. below what over is but for the already companies market I full our have happened past of X weeks, don't granularity of the year, like

So will us. to adjust -- we comes to but whatever

Operator

Your Picariello Paribas. next question with from BNP comes James

James Picariello

first Just the product, battery Can the in the I call it just visibility this revenue? $XXX and back the year. speak to you to $XXX revenue. based for quarter's business into million performance believe million to guidance, on systems

this the portion curious clarify what eProducts you there this Just are moving hybrid? to any to pieces can of year's sales if range? tied attributes within product And

Frederic Lissalde

billion vehicle. guidance, out $XXX are eProducts year's So packs this for for battery midpoint, $X.XX commercial million at the of which

So vehicle, hybrids global basis. is which of XX% for $X.X for a light billion on is

in Seneca there your first also And is to in plan. see line our in nothing battery we Europe in Regarding of packs, up is QX. article preparation with the question increasing and capacity on The expectations. what is ramp

James Picariello

line foundational helpful. year, profitability with quarter the cadence that And on given this think Colin's in full question squarely the of regarding I margin first product, about just your touches range. then as was the we the That's year versus think rest and

also eProducts to the the year, of the margin improved improves. sequentially it that assume is your through safe As loss rate revenue

the through my true. if year makes is so would is, And range profitability why the degrade sense? that right number, My if the guidance foundational if the question question, full year that's

Craig Aaron

Yes.

way the executing wherever on think is we're mid- to high basis, that come growth an at I focused teens on we're all-in looking it may from.

So think it. you us We think year. for full XX% think that's We're I with the to how should quite about in, the third all really quarter. execute it sets in pleased well our up

focused basis We're So where at really that's from. growth of how incremental all-in looking comes on revenue we're regardless it. the an on

Operator

Junk Baird. Your Luke next with comes thing from

Luke Junk

the First, looking segments. at

quarter Drivetrain like that margin, sounded specific year-over-year saw foundation large stepped the sustainability Battery that know as hoping anything maybe to. line they've just especially in there's up Just you well. related don't maybe point this was to the if and strength sequentially, can in part, unpack that of strength top Systems nicely I you in

Craig Aaron

margin it's Yes. I a of Again, business our see in XX% Europe units. overall the of performance you overall business DBS side side on we it all-in was point and great performance growth would When But had of think about in That's and growth, business, particularly from you battery general, the can to. But and the good in DBS in also would foundational segment. on the both the it you just by I China segment. just both say China perspective. again, where in most really Europe. that nice

Luke Junk

for And Got then and net thinking gross engineering? just maybe the going as in given increases basis book just that margins. West, a you it. push bigger Fred. in some those think picture for ePropulsion of to follow-up, building about or you uncertainty pay more And But recoveries I'm going also engineering eProducts, as both forward, business improve forward question, for margins structures here my engineering you requirements more can if can about you now wondering,

Frederic Lissalde

I thought as the to performance. not order also we're margin recovery. we at We're from for especially in adjusting as Yes. this those improve engineering all costs, looking in which segments growth looking an happening our at mean is fast

teens, when ramps. those high those it's eProducts cost incremental segments, to get grow expect fully going upcoming So it this business forward. And in to to to with actions we mid-

Operator

We with and from question Sachs. have Goldman final Delaney time for comes that question, one Mark

Mark Delaney

the and broader a customer trends that to has more price today. to to given efficient way that that more market lot dealing role the an that I'm do for business. you with in bookings played a the think part in value need you were of a might for the products for efficient? electronics if be that your of And the utilizing think of outperform ways find customers some a eProducts a lot of to can curious are to BorgWarner's proposition OEMs of some these if of OEMs be been able challenges do announce power be BEV competition, I wins opportunity BorgWarner's some

Frederic Lissalde

power losses has those company. hybrids. And been switching Only a absolutely inverter. always the efficient downstream of is efficient against the mobility. new think those strength you're the systems key and on and electronics right. focused fighting efficiency mechanical Well, Fighting or in BorgWarner against is losses front

absolutely So DNA. module question that. our best. on that's do level. power is That's the We're answer to focused at yes. level, at the your the we system and And at electronics the what level,

Mark Delaney

eProducts $X.X the year. for company to eProducts, this outlook revenue the billion billion reiterated $X.X on And

plans. seen vehicle of light back Of course, volatility we've lot a in

XXXX, still see about but $X.X the And you billion. for think you not previously I'm something products what also and on how the do maybe think so as Is only that And touch thinking that, about outlook understand, into that hoping as we've maybe communicated your year to achievable? you're you of better XXXX this new a to seen that eProducts you've ramp as profitability could XXXX? you revenue billion $X

Frederic Lissalde

absolutely what So be. depend you're will ultimately upon right. will will It customer that and decide XXXX volume,

'XX on control, what is We portfolio it our focusing in our to and to teens are, order our strengthening in products position deliver basis. focused we incremental color in we focus, overall more and give all-in mentioned, businesses for hybrids, high to to great new on on you That's an as we'll on can costs closer 'XX. a securing new mid- for remain which matching

Patrick Nolan

today. questions all for you Thank great your

my conclude me can and If you or call. team. you you ahead that, follow with go can today's any have With Britney, follow-ups,

Operator

Results First does Conference That conclude Quarter Call. XXXX BorgWarner

now disconnect. may You

BorgWarner (BWA) 2 May 242024 Q1 Earnings call transcript