BorgWarner (BWA) 31 Oct 242024 Q3 Earnings call transcript

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

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

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

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

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

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

We will performance. margin also refer to our incremental

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

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

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

provide our portfolio of believe results awards our sales QX Thank quarter to for e At I'm we believe We than X% [ product we by in you, products, our update, production basis and is about starting the market. technology-focused outgrow on our Slide our profitable our down share a outperforming X. pleased long-term very and modestly outgrown the market Year-to-date, organic secured an points. about multiple resiliency we that everyone. Pat the demonstrates foundational were overall positioned This day, third for more have to market XXX which further support billion, ]. year-over-year, growth. both decline X% new and company $X.X good

We year. Turning line to strong the points bottom higher basis margin, for was than quarter. our XX.X% last delivered which a very XX

cost delivered We which strong was This across on per driven earnings also by operational primarily controls of our year. higher focus was business. than performance the underlying $X.XX, $X.XX share prior

cash margin margin earnings year-to-date us later. enabled as Craig again guidance, our performance strong to and detail Our once increase and full year will

million remained Lastly, completed the and planned deployment capital our BorgWarner XXXX of we on stock. repurchase $XXX of efficient focused of our

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

American North OEM the begin with securing are use XXXX on for pickups. of two production two supply OEM cases full-size the Start of has platforms BorgWarner 'XX. transfer the to by for types for business for to third major will slated three cases extensions furthered a two its transfer in the First, platforms. with on of BorgWarner expected

products. quality of years. with team's over our cases transfer believe supplied our XX proven architecture, extension field We performance for have this solidify and and OEM the We reputation this

the be three use and platforms, vehicle released Corvette deliver for in secure car important passionate used an been has expansion high-voltage continued In XXXX. These electric heater rapidly a marks to most of them continuing leading proud expected second producing will is energy of the vehicle General technologies region. And and date. in used Next, wins temperatures, GM's XXXX. high-voltage heater been performance Motors and business industry. exciting of for twin turbochargers design for and in chosen further compact XXXX. by General OEM electric BorgWarner Pacific forward our driving critical quarter our to market-leading in significant fulfilling in to begin superior start presence car on coolant BorgWarner efficiency be will March offers passenger smaller history some perfect wins segments, powerful vehicle strength lastly, with production BorgWarner vehicle, program the and production partnership small with to now our have enhancing new come corvette be and support marking fully The a industry this push coolant The product a delivering see to growing ever works teams. business company's in the to production a both heater in application be efficiency. for time range start its produced This of this Motors fruition growing managing in across Japanese solidify battery the In high-voltage Korea, heater our ZRX heater making cabin Asian and we has and China's three the markets. sports China, in boundaries. will in to the with wide has in will expanding country. BorgWarner built. with In This and platform, contract in Asia, to in its our in We're develop reach Asia estimated domestic electric the field fit secured electric a to the expected look technological demonstrate in marks it turbochargers step the This our technology OEM's electric to for SUV vehicle a the long coolant and experience. Japan, improving pickup largest first forward

unit effective July where would I sales following X, like Slide realignment to our net was to our turn let's that share X. Now business breakdown

units business now with reported segments. aligned our externally are Our

On our and and flow #X each slide, more they our ] segments which business world was turbos and XX% engine our sales. sales mature except of net with These comprised cash The foundational segments, [ in the the their represent margin most you unit is the businesses of from of enjoy drivetrain powertrains. left both the #X previously efficient business and strive remaining our and a approximately see products. and hybrid product reported systems net or charging XX% segments systems as These strong our as net generate will and side for continue technologies that positions for expect serve. unit, PowerDrive They of that thermal market to different profiles products. combustion Systems looks more sales our of battery control we are ePropulsion

significant electric of and are be All sales these from future These expected of for eProducts growth. generated to battery vehicles. two hybrid segments our these segments, drivers our

approximately by of As Regionally, sales. we shown and mid-teens, seeing X/X the represent these is slide. to the scale, world, also are this and businesses to the BorgWarner's net of what their we want highlight year. I continue converting of sale expect Asia, Americas, rest diversity customer Europe at right on each regional capitalize on which growth to our

to of customer positioned strongly groups. in various exposure terms also are We

overall German ]. our to comparable year. net North the to Detroit sales This sales Europe of [ sales local far the OEMs in is sales For the so and example, X represents American Chinese to OEMs to this our net roughly our our XX%

performance summarize, takeaways I across think this slightly market was chart the products, highlights and results customers resiliency Sales clearly of from strong and regions. To BorgWarner's sales quarter are: diversification BorgWarner's shows third than the production. strong. better benefits were today

our of portfolio, we again was adjusted repurchases plan, product eProduct in new $XXX strong. our secured million on sides growth Our quarter, to on share repurchase $XXX market once This our taking million. focus to which further full the XX%, operating profitable our We us foundational and second awards accelerate very over and believe cash leadership year was our production. our margin generation supporting both half over business demonstrate allowed

is As we formula success look forward, for unchanged. our

that us will continue allow to We production. expect to to grow to business than faster continue secure market opportunities

before, I driver hybrids both efficiency fuel As trend and is remain industry BorgWarner's an come to includes I electrons propulsion combustion growth regardless mentioned which BEVs. to to of for and focus strong a efficiency DNA efficiency, years on or architecture. expect for propulsion BorgWarner's efficiency of

our long-term appropriately deliver performance for over the to market structure to let leadership will this industry above believe We growth organic to into sales through shareholders. With allow and mix long-term manage propulsion seek to focus value outlooks and earnings call growth growth turn profitable me change create cost our that, to continue continue as higher convert our product preserve We volumes continuing to edge. and while Craig. BorgWarner that

everyone. morning, good Thank you, Fred, and

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

excluding primarily over growth. just and M&A. was basis X% billion quarter we XX the $X.X of down battery by which sales quarter, sales, prior approximately reported approximately in modest was approximately driven in in X% so year, down which FX we production slightly market was the First, outgrowth saw above which This versus European points, was

benefit solid Second, was performance, continued across quarter focus July, cost our driven customer of the recoveries. the restructuring controls we we the had This by and actions continued business strong margin in operational on announced at in XX.X%. performance

plan. our us $XXX had the cash accelerate quarter we strong repurchase of free second $XXX Third, allowed flow share half in million, million which to

delivered also our continuing on result while in growth. business this to we long-term support invest Importantly, profitable to focus our organically

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

that sales a points X% to XX added sales decrease due of can growth. was $X in see QX. sales Then all strong million of market drove which Eldor approximately billion And over of of a You year-over-year. the $X.X dollar production, battery $X of U.S. sum the in year-over-year you The see million. this above primarily can was just acquisition sales European in organic basis finally, weakening increase of

to Turning can quarter. and flow X, cash Slide the for our you earnings performance see

helped on July. partially This operating operating million, compares our program eProduct This $XXX items a Systems impact sales. X.X% a million $XXX of Our a volume million from XX.X% margin. was great basis, year announced and related a despite comparable of income lower in operating and reflects a by a that our to That or ability recoveries income continuing from year-over-year. is increased a adjusted ago. benefit $XX of million PowerDrive deliver million adjusted equating $XXX operating income was to was we drag to margin and environment. production operations strong On for the $XX third net adjusted $XX customer income favorable declining result quarter to shortfalls restructuring The of million performance of profitability Eldor

$XXX adjusted strong operating our Our million adjusted during finally, a strong EPS in which flow a quarter, third to the capital impact $X.XX from the $XXX up working free year the result decline continuing a And quarter. performance. from ago, operations ago in income, operations cash as million and of up of rate expenditure of compared a was and tax as repurchases continuing year effective was a million capital was during share $XXX result from

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

sales resiliency production that the the the total projecting is to the from portfolio outlook which billion, reduction to is lower XXXX of $XX.X modestly billion. XXX guidance points, which market are prior We with to $XX.X a outgrow Despite of sales range $XX.X a sales. eProduct to by XXX our again market currencies. is expect market our to due positioned in lower outgrow million reduction production. Starting technology-focused to foreign of believe once and production we $XX.X This basis billion company we demonstrates reduction,

sales end this from down Our to guidance X% down X% now an of XXXX. previously. full $XX to market Within X.X% year assumption been currencies our reduced versus million foreign to full year headwind has weaker compared assumes expected to X% guidance,

points. year-over-year be Finally, outlook, and add to expected sales production Based are X.X% on above million sales. acquisitions change XXXX our SSE $XX of outgrowth down XXX or basis we flat Eldor expect XXX to the approximately to industry to organic updated to our

to let's Now margin. switch

year prior the outlook to to drive portfolio restructuring This guidance of This performance X.X% of margin in and very We in to demonstrates PowerDrive on announced benefits technology-focused based Systems our our are to we continued margin year-to-date ability that increasing increase July. profitability our of is expected resiliency end and challenging our our XX.X% X.X%. markets. from full our X.X%

impact strong as executive [ of retirement. our to to sales the in driven a stock boat fourth decremental share. implied $X.XX the second assumes per performance X% underlying to year our in X% compared compared mid-teens quarter is of that being EPS $X.XX margin outlook, our market prior on Our this full during quarter XXXX. Based year-over-year share of adjusted tax year-to-date diluted delivers lower a fourth reduction We production third quarter outlook share we're mid-teens the conversion EPS a eProduct business of senior related count view third the X% excluding our effective volume-related rate. expecting by quarter given due and to and customer average quarter results, the forfeitures outlook ] This increase execution our range quarter conversion a full and recoveries to year anticipated the plan our repurchase strong the to decremental third decline results, of benefits in

to range be to in $XXX We to a $XXX million continue expect cash million. year of free full flow

demonstrates focus guidance a margin our we're guidance prior doing managing and our significant absolute on challenging reduction income hold environment our this a to global order production increase in industry ability dollars, volumes. Our EPS despite and to in costs during

XX Now we our a at cash to will flow. to $XXX XXXX expected million turn free let's deploy Slide look take and million in $XXX how

also already of declare of shares cash important $XXX million deployed $XXX pay million of the I the our quarterly will we shareholders underlying capital expect return million is the the in quarter. almost ability If repurchased flow of We guidance, paid highlighted, while year of in and approach flow free fourth just shareholders. has free that assume of that follow company quarter, million been we allocation $XX sheet this the dividend in through allows our importance and cash growth third be the As dividends XXXX. a our deployed cash demonstrates midpoint cash that capital with generate end already and long-term generation. will to to business we invest our all to investing consistent flow another to the $XXX shareholders our in that us of expected expect of believe profitable flow. strong and to in the At of to strong free balance a we to balanced strength note It reward maintaining shareholders

So to summarize was quarter third my XXXX and strong financial higher compared a delivered quarter the sales remarks. a strong a We a margin than we margin, production. me XX which very XX.X% second row in Overall, with points industry let XX%. delivered outperformance basis with above

accelerate cash once $XXX market did profitability industry generated positioned our which we half technology-focused flow. we and production deliver in repurchase in that production Additionally, flow, shows us our million second share This quarter. to to million And is $XXX free allowed the resiliency plan. we believe of strong cash again challenging this outgrow and the portfolio free despite

you the We despite industry proud second to year our are Difficulties] Connie, outlook and this increasing for time margin a be EPS declining can us? volume [Technical hear

you can for Connie, up I apologize the us, for audio can if interruption. hear call we up questions. open the

Colin from Wells first take Fargo. our We'll question Instructions] Langan, [Operator

go I talked a year, Investor margin the in in about Day last wanted you to XXXX. to back actually ask, June if of XX% we

end you world from convert could [ would It if you beat Now have at pretty high guidance, from EV of to like expect 'XX impressive last years. already? the has over margins so you bit same kind anything imply the prevent should at worse we been might getting of this since there think target XX%. be we above that sounds that a I that year, could there contribution, that which think the of actually kind growth, ] your X.X Is here? the How we about is if

quarter. strong the Overall, start performance. operational quarter, with the really Let's

real restructuring mentioned business. in a ] actions, script, controls the cost I on we volume-related of PDS focus And across mentioned [ benefited we a from bit that had from my also recovery. a I As tailwind customer

with pleased our the So really quarter. in performance

to look look two fourth our at how should to you you think really As it. I the quarter, at look performance ways

year. the for performance average our against First, full

mentioned our expecting X% that gets That's at you third onetime guidance. script, the and remove decrementing to and at be let's I to that down, is call one way just second look you our mid-teens, quarter my performance. quarter quarter it to X.X% us of If the the look in guide, midpoint in which what expect. That the at items roughly for when would the you revenue we're in the fourth we're

gets If you for year-over-year down the midpoint. us at again, the look at our revenue about holding and ]. Again, performance X.X% X% fourth that year-over-year, quarter, actually incomes [ we're to

right it again, that delivering the at look you I way our And in perspective, either at we're good operational think fourth X.X%. around midpoint, from guidance So the quarter. on focused performance

long-term the sort on pretty about about pretty follow-up be of as 'XX target, we that Because seems should Anything close. 'XX, close. it a you're awful that like thinking we XX% above prevent getting guess I target? that you're think would

to time We're incremental we've or that our We're talk about 'XX. And the 'XX term. guide in about and call. can the longer controlling not you talked decremental our see It's matter. focusing on it in think I for focusing QX on

from question comes next Your Barclays. Dan Levy,

I the the but EBIT on decline been on million you at a Based $XX on the were year-over-year. that decremental, wanted double-click would instead it, XX% plus call margin XX% to XQ. hit a in just revenue have

So adjusting you're even for more swing. a if $XX million Eldor. that's It's plus

$XX benefit sort the million can just And of know is maybe benefit a but sort the of ongoing restructuring benefit? then you there's maybe versus much -- of mentioned another was recurring how million, decompose you So I for that? there $XX on the onetime gap. maybe still ePropulsion, that

we controls of To from productivity, recoveries, volume-related announced [ quarter, focus when your PDS question, at ] PDS restructuring quarter. it strong in et onetime in savings, the from We're customer cetera. answer $XX million cost performance. a that's really the July. just of like item that Overall, operational you our look benefiting said, We're was you restructuring Yes. the the benefiting

that You repeat should not quarter expect quarter. to after

restructuring And benefit? what's ongoing the

The million said you PDS for $XX to the million ] $XX restructuring, [ year. full

structure, business. Second, I new can appreciate the we the now segment battery better with see

How If the demand just you strong growth new double there. on maybe click online. that versus of is just could much supply getting

new grow? I should And assume this that profile near mid- that up increment think growth is to just we continue then to and for a the that a Just this to margin lot think interesting of way of to as can of business? profile your going high working business type What over breakeven, time? that way it's you about to supply. we teens see it sort is expect of your

of Dan, way why there, and can incrementing performance. I'll control, decremental driving start. focused strong Yes, was right? market what segments the in business this too, So very we're other I And see very, at it when was the there sales, I challenging efficient look reason the for battery don't the the XX%, quarter, controlling Europe. we good especially not at adjusting on incremental the in and -- of think on think to should meeting. for a volatility a carry you on can see segment, really guide. the the margin And you I that on a on the about

And the much supply new dynamics, just this of hitting? supply is how of sort versus demand

not North demand America are, both regions, say, say the would short dynamic I is aligned where supply, now and capacity supply Europe. dynamic demand have in let's to we we of versus a

behind is us. this So

from Joe question next our UBS. take Spak, We'll

with of sort that by capacity this maybe year, segmentation. think we improvement you're of and new some out just the And and built have -- up. your of guess, pretty question end margins I Dan's fully going is the steady battery charging. sort of fill Like sort seen on to the of to there I in know I in follow

just to of getting remaining margins, other -- Or that up that positive of capacity? sort filling remaining is the are actions in there So sort segment?

We at continue to Yes, it's business. scale. got really scale the to

right scale then what we're increment get we So million in that's coming doing. and you mid-teens, as breakeven to saw business And to we'll revenue focused in and above. the in the continue that quarter on around $XXX

is the And done effectively build-out this quarter?

complete. It's

should But generation think similar a I the the was sort 'XX just between stressed, that sort about all times, redeployed shareholders here you paradigm dividend. couple a then mean, year And right, over sort talking going the we're of that to this is of yet. I of the coming expect appreciate I forward we and buyback Craig, of years? cash not

all way at as 'XX cash you with we we've that we've the deployed when get insight We'll have Again, you give midpoint of Again, guide. on into million our get year. of this that comment capital the we with 'XX. this as We'll effectively of I'm happy we'll allocated to 'XX Really to sight Yes. to that line mentioned, the pleased year. really way shareholders. into February. we $XXX apply

comes Stanley. Your Morgan Adam Jonas next question from with

the Thanks, of everybody. free my flow and Joe cash paradigm just that's how asked on much returned. question

them repeated. left recoveries for I is written and out, of including seem likes from your off, the does of million that saying programs So EV continue. some are suspect onetime, just customers canceled know you're it We others. sizable, $XX is the one of Ford will But be pushed and narrative at some from me. quite the won't the margin, like

seeing may anywhere announced products EV-related looking in that that what discussion ahead is what onetime near right and OEMs, your I'm So out the But expected on know XX you're occurrence made am if and which spend or of a has I at the at quarter so not calling from cancellations more that given there product of recoveries all? possibility be not months, didn't a been specific was, you of and you volumes far again, or I in items. money if for

measured is bringing into from BorgWarner transforming reusing the flexibility a a and in [ What case X combustion specific. focusing a from standpoint, on from I also flexibility plants say this production modular standpoint, design exceptional. Each a walls case that is our would we're electrification is little ] way. at

and on I business that And manage So very long depending going happening. we are we're specific, forward what's say the the case with our would is to run. for going each customers

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

look And something in new I go product? on to Slide you X, wanted next-gen minimal? case much transfer to that needs be we better? extension, margins just or Fred, historically be significantly than significantly or profits the returns of on ICE better when it the just extensions even these ask the how and they bit as been sort a capital see could like and side, Is at into investing returns could have

this in won't comment on case have from standpoint But we the is happening a three I Yes. what program. marketplace. elements specifically transfer you see combustion

program have like the in First is the to extension, transfer case, [ be ] with where go some and to less. maybe extension put sometimes capital place

case. that's So the first

Second case the engine for of case engines is where combustion the combustion that market And what's be carrying program case. the combustion to And is third prolongations over application. also gasoline an run hybrids driving outgrowth going in that's longer. the is [indiscernible] specific for

you good shifted dramatically. Slide second question. just But activity kind maybe history maybe could again, timing a out and quoting terms And by your the bidding take that's now suppliers once in EVs, disrupted what's that? or I really your quite just some if you're think being lot anything I wonder very process just it's absolute right pushed on is than or bidding there of then A or different on program you characterize the current And terms? mean, are X, pretty other of wins. to process if alluding showing

reasons transfer bit key electrified carrying a over before us one the in quoting I focused electrified and/or many think of combustion at North that again, launching And of a John, with and launches what powertrains. all on engines combustion Europe activities slowdown opens And there America. including the the in we're is alluded world, on and new extensions is so There the what that many, are opportunities I BorgWarner. powertrains. that hybrid seeing is prolongations for to for in we're hybrid BEV that case, into other Western

dynamic the the that's in see marketplace. that So we

that, But market long-term does not to would your mid- on over it prospects? impact say that growth be have significant a fair to

respective the architecture, regional and is various outgrowing that propulsion scenario, to portfolio carry expect on mix to We have and our a scenario expect resilient we on mix markets.

comes question Baird. And from your next from Junk Luke

the -- a pipeline, a guess, picture just is evolution to First question, bigger more hybrid specifically standpoint, in Europe just in response last both in I'd powertrain on regulatory you that. to I the for Fred, and hybrid -- if on any [indiscernible] you're from could play there, hoping just interested that, your standpoint, on be building seeing going you backdrop and in relative how solve U.S. the comment

For us, it's simple. fairly

is of combustion And into standpoint, modern eProduct an carry powertrains. most BEV hybrid hybrid. an most products. Our the mentioned portfolio inverter in The we the for as and on as powertrains past, combustion advanced fully an our inverter fungible hybrid for is same

for products. same. same the simplifying, So a over actually but the same much IDM And types is the ] can I'm it's [ the gas ] motor are BEV, of the pretty PX for hybrid be an [

we customers powertrain they want into go a to serve from our standpoint architecture going to globally a position are in So wherever forward.

the think So can wouldn't is doesn't why market markets that and say outgrowing carry on outlook. for I really it we this matter, we convert us, but the or that on

wondering just could we flavor And some if incremental Craig, cost controls for then follow-up, productivity. my get for

what areas back understand some carry leaning Just of help XXXX might us the half into for that year? over into you're the of and this

those as And focus, I the all the especially I items have top stays you we're see the leaning on were mentioned the focused the can it's real -- savings, us business. that to productivity, segment think helped continue think continued whether performance that it's actions, we're the controls. all or that's that chain across supply you line through on volatile. first leaning very in cost across into our whether into things. that of quarter, focus restructuring X We'll months. We're whether Luke, business in

Your comes BNP next Picariello from Paribas. from James question

are Like implies this suppliers there something On calling for signaling right, close for down to X.X%. are assumption down there that quarter XX%. the X which now, LVP down other you're X% to fourth year, out the precipitous

my thoughts in on build question. first Yes, own customer Just own curious mix, in that's your your there and that the on schedules, visibility your point.

year-over-year. James, will down our X% X.X% view is be to market the

Our biggest effectively X.X% going increase managing to too. slight what our our dated this adjust evidenced reductions think X% And down we guide and environment to a carry with is on America, China. to costs And and in I year-over-year Europe we in are That's are North potential production changes. see.

systems, My to to your splitting then demand the do the and more I in is [ some that potential [ product think drivetrain side we between kind hairs was on vehicle ranking run if suppose. just two the foundational stronger other could referring you ] segments, hybrids suite Thermal and component, one just those is you ], turbos the much versus still about as share? again, there's for light yes, foundational view but your of position Yes, and I how segment the demand. follow-up hybrid Between

don't think everything the of that engine shifting would will broken we've potential. turbos shift motors I down [ have most It we in mechanism I to combustion segments advanced other also the hybrids would ] driver hybrid. and between subsystems. components carry say eDrive both that carry that it related in touch the and

segments. powertrain from I foundational would products So those grow two say will hybrid that essentially advanced

from comes question with Mark next Goldman Your Sachs. Delaney

assume over you points. market XXX, believe growth now And previously. had been XXX I XXX basis to are to XXXX think of I First, assuming it XXX for

what's So understand maybe our of you can help market better outlook for us growth in this the year. changing

dropped from $XXX has a half, off probably growth eProduct about our million portfolio. and coming Mark, So

from business, extremely not which foundational would a [ I not is material our million $XX I is would and about it. out billion quarter-over-quarter, our growth, from ]. look coming is half it really say $XXX other of The at so

And are it's I year-to-date points. basis quarter-to-quarter. smooth We think always at now XXX

pace question if of bookings think slowed. question a around curious bookings the John's years? up My better if in the you post-U.S. on election once following accelerate the activity COX potential for Western the I'm and the just on Western was OEM award likely activity OEMs have understanding requirements has sense they of path other coming to there's results, from

I on can sure comment not am I this.

least we're customers At Let's wherever wait already BorgWarner, [ and to want the go. see. at ]

and one time final We that Emmanuel Wolf for Research. comes Rosner have from question, with question

actions from cost we finer reduction put amount and you're help cost you how How of do annualize that can year? a how taking you how you've hoping it them? much left cost about Like the or have was year? is programs like the they you left think announced recent actions? take And this on place, I in about to us How speaking, out? over do of is into more think point out structural the should much next generally

to point in announced PDS is What we restructuring making. are $XX year I'll to July. We we're million that the indicated this that structural changes because those million. $XX So

year of making. target that you with $XX if structural are by million that a to XXXX. So we're changes $XXX next $XX million Those annualize million

to from regardless As over in move our you think the about growth of what's business the and grow are goals of is portfolio mid-teens, foundational Our as even sales restructuring growth that turn actions, side market these into to income forward, on goal? product we generate our with the perspective, the a cash. the

mid-teens. That's the it. growth our how model I think incrementing way in you is to think, a great So should ultimately, about

to in we strong And then then I also this leverage a the on BorgWarner's then just bit business. mid-teens. talk vehicle about comments specifically. in your reason very on and the and again competitive to big more Can commercial us little saw, Obviously, stay in obviously the a operating you advantages that spoke maybe mid-teens. battery that hoping quite why earlier business was XX% I no incrementals difference between about you shouldn't business the think That's hone

but competitive ] BorgWarner's the are the term is, longer-term you please? is maybe shorter question leverage, about think So do [ maybe what operating how okay, advantages,

everything of in in in that as product in of of which in one think vehicle an NMC vehicle within pack the focused sales and form trucks of the buses around pretty only Europe. impactful trucks capacity in the production ] the a and both and Emmanuel, light pond pack, differentiated. are in commercial [indiscernible] the U.S. production independent on assembly installed testing of pack, and LFP we and association world are with the pretty I have this, we And from goes perspective, we agnostic of we are only building as sides are commercial charge is a our with And buses. you preparing So we [indiscernible]. [ Western one With of from the [ very know, ] perspective, the software, cybersecurity,

margin quite with quarter, the like the of you Yes. really that And the It comment on converted mentioned, performance high the really happy profile. grew business. significantly dollar. $X.XX Obviously, I'll level, a on in at about

As we move a forward, I wouldn't say trend. one quarter makes

that in how charging the all on our of That's battery the business. in businesses. we'll business focused for success measure mid-teens the we're So like business, other incrementing

today, you. I'd for your we audio that you questions. issues to apologize great With all that, Thank the and thank had for like

to that, go have you to additional feel me With team. If reach my you ahead today's or and out call. conclude follow-ups, free Connie, can

the Quarter Conference conclude Call. Results XXXX does BorgWarner This Third

You may now disconnect.