Garrett Motion (GTX) investor relations material

Executive summary

• Q2 2025 net sales reached $913M, up 3% year-over-year, with net income of $87M and adjusted EBIT of $124M (13.6% margin), supported by cost actions, tariff recoveries, and FX gains.

• Gasoline turbo and commercial vehicle sales grew 4–6% year-over-year, outperforming the industry, while diesel and aftermarket segments declined.

• Over $1B in light vehicle turbo program extensions awarded, with new wins in E-Turbo, E-Powertrain, and Fuel Cell Compressor technologies.

• Continued progress in zero emission technologies, including new R&D center in Wuhan and major innovation milestones.

• $52M in share repurchases in H1 2025; Q2 dividend of $12–13M paid and $0.06/share declared for Q3; added to Russell 2000 index.

Financial highlights

• Net sales increased by $23M (3%) year-over-year, driven by favorable FX, tariff recoveries, and new gasoline launches, offset by diesel and aftermarket weakness.

• Net income for Q2 2025 was $87M (9.5% margin), up from $64M in Q2 2024, mainly due to lower interest and tax expenses.

• Adjusted EBIT margin at 13.6%, down slightly year-over-year; adjusted EBITDA margin at 16.9%.

• Adjusted free cash flow conversion reached 98% for Q2 2025, totaling $121M, supported by working capital improvements.

• Gross profit was $181M (19.8% margin), down from $185M (20.8%) due to unfavorable mix and pricing.

Outlook and guidance

• 2025 net sales outlook raised to $3.4–$3.6B, reflecting favorable EUR/USD exchange and full tariff recovery.

• Net income guidance increased to $233M–$278M; adjusted EBIT to $470M–$530M; adjusted EBITDA to $590M–$650M.

• Adjusted free cash flow expected at $330M–$410M; capital expenditures targeted at ~2.5% of sales.

• Industry outlook: light vehicle production down 3% to flat, BEV penetration at 16%, commercial vehicle production flat to +2%.

• Full tariff impact in 2025 fully mitigated; price and productivity actions to drive margin improvement.