BorgWarner (BWA) UBS Global Industrials and Transportation Conference summary

Performance and financial execution

• Outgrew industry production by 200–300 basis points despite a challenging market, with industry production down 3–6% in the second half of the year.

• Increased operating income and margin, with margins up 30–60 basis points year-over-year, excluding Eldor.

• Generated approximately $525 million in free cash flow, all returned to shareholders through $400 million in share repurchases and $100 million in dividends.

• Maintained a disciplined focus on cost structure, productivity, and savings initiatives to protect margins.

• Proactive restructuring, especially in PowerDrive Systems, to align costs with evolving demand and customer commitments.

Market outlook and regional dynamics

• Industry production remains challenged, particularly in Q3 and Q4, with cautious optimism for 2025 depending on improvement from current run rates.

• Regional differences persist: China benefits from stimulus, Europe faces regulatory uncertainty, and North America is impacted by election outcomes and slower EV uptake.

• Export sales from China to Southeast Asia and South America are supporting foundational business growth.

• Flexibility in manufacturing footprint allows adaptation to customer localization and shifting regional demand.

Portfolio strategy and product launches

• Resegmentation aligns internal and external reporting, with two foundational (Turbo & Thermal, Drivetrain & Morse) and two eProducts (PowerDrive Systems, Battery & Charging) segments.

• Foundational segments contribute about 80% of revenue, are highly profitable, and support hybrids and ICE vehicles.

• eProducts segments are positioned as future growth engines, with multiple global launches planned through 2025, especially in PowerDrive Systems and battery business.

• Battery business targets $700 million in sales for the year, with capacity expansion largely complete and future growth dependent on customer demand.

• Partnership with FinDreams to supply LFP battery packs outside China is progressing, with commercialization expected in a few years.