Borgwarner Inc at Deutsche Bank DB Global Auto Industry Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Emmanuel Rosner - Deutsche Bank AG - Analyst : Thank you so much. So let's dive into it. Let's start maybe with global industry conditions. How are things playing out so far? The announced plans to restructure and spend about $130 million to $150 million over the next four years or so to achieve savings of $80 million to $90 million by 2027. What do some of these restructuring plans look like? And where are you now on those efforts?

Question: Emmanuel Rosner - Deutsche Bank AG - Analyst : Any savings this year from?

Question: Emmanuel Rosner - Deutsche Bank AG - Analyst : Got it. So let's talk about your eProducts growth and margin outlook and the charging forward plan. You have a target to grow eProduct revenue to $2.5 billion to $2.8 billion this year. It seems like a good portion of that is from China. Can you talk about the growth drivers in that market? What is your customer mix in China? How are you positioned to win market share? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 11, 2024 / 12:15PM, BWA.N - Borgwarner Inc at Deutsche Bank DB Global Auto Industry Conference

Question: Emmanuel Rosner - Deutsche Bank AG - Analyst : And can you talk about the, I guess, same ideas in terms of Europe and North America market share dynamics? What, where are you positioned to? How you position to win there?

Question: Emmanuel Rosner - Deutsche Bank AG - Analyst : If I look a little bit beyond this year and you have had this eProduct revenue targets for 2025, $4.5 billion to $5 billion. What is the risk of delayed EV launches to this target? I think you had stated that all of your 2025 new product sales are booked and the vast majority of the 2027 targets, which is, I think $10 billion is also booked. Even given that you're still a few years out from 2027. How much conservatism are you baking in on that target? So I guess well long question and trying to figure out the 2025 and 2027 targets. To what extent these are at risk or not. From what's going on the EV side.

Question: Emmanuel Rosner - Deutsche Bank AG - Analyst : Let's talk about your battery systems business. You have capacity expansion this year in your Seneca factory in the US as well as in Germany, as the production ramp going?

Question: Emmanuel Rosner - Deutsche Bank AG - Analyst : Let's move to the margins in eProducts. Using the Propulsion segment as a proxy, we saw a dip in Q1 margin ,how should we think about near term trajectory on this and exiting this year?

Question: Emmanuel Rosner - Deutsche Bank AG - Analyst : So despite the first quarter starts, you still targeting this on a full year basis?

Question: Emmanuel Rosner - Deutsche Bank AG - Analyst : Are you still targeting 7% adjusted operating margin in 2027? And do any of the recent developments, whether if you changed the way you think about this outlook for 2027.

Question: Emmanuel Rosner - Deutsche Bank AG - Analyst : Couple of questions on capital allocation and that should leave some time for any questions in the room as well. So on capital allocation, the part of the strategy in growing eProducts business had been through M&A. Is this still a priority in the current EV slowdown, which obviously is in some geographies. If so, what are you looking to expand on perhaps in scale or for that portfolio? Is there anything on the near term horizon?

Question: Emmanuel Rosner - Deutsche Bank AG - Analyst : In terms of focus on. So I understand the strategy, but is it more EV or less EV than it would have been before?

Question: Emmanuel Rosner - Deutsche Bank AG - Analyst : Yes. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 11, 2024 / 12:15PM, BWA.N - Borgwarner Inc at Deutsche Bank DB Global Auto Industry Conference

Question: Emmanuel Rosner - Deutsche Bank AG - Analyst : You re-purchased $100 million of shares in the first quarter as in close to $200 million in the fourth quarter. Are you accelerating your allocation to share buybacks? And if so, how much of the $500 million to $600 million of free cash flow guidance for this year could be used towards it?

Question: Emmanuel Rosner - Deutsche Bank AG - Analyst : Right, let's open it up for questions in the room. For the question,[just raised your hand and we will share a mike]. Unidentified Participant Good morning. [Joseph Lescarby] of Deutsche Bank. I have a question on the competition in your eProducts or systems. Essentially we see that volumes are far below the budget, especially in Europe, for example, and competitors in Europe struggling to fill their industrial capacity. Is this leading in basically the IFQs that you see to more fierce competition, which makes it more difficult on price? Or is it actually that you're seeing a couple of competitors dropping out so that your environment is improving from a bit of a slowdown and the OEMs partnering with the bigger players like you are?

Question: Emmanuel Rosner - Deutsche Bank AG - Analyst : Awesome. I think, we're out of time. So thank you very much so much.