Hyderabad, Jan. 27, 2026 (GLOBE NEWSWIRE) -- According to Mordor Intelligence, the automotive turbocharger market reached USD 12.30 billion in 2025 and is projected to grow from USD 13.61 billion in 2026 to USD 22.55 billion by 2031, registering a CAGR of 10.62% during the forecast period. Market growth is being driven by stricter emission standards, engine downsizing, and the growing shift toward hybrid powertrains as automakers seek higher efficiency and lower carbon output. Turbocharger manufacturers are ...

Core Viewpoint - Schaeffler has agreed to sell its Chinese turbocharger unit to Chengdu Xiling Power Science & Technology as part of its portfolio rationalization strategy outlined during its capital markets day in September 2025 [1][3]. Group 1: Transaction Details - The turbocharger business, currently under Vitesco Automotive Shanghai, generated revenue of up to €100 million in 2024 and has a workforce of around 50 employees [2]. - The deal aims to strengthen Chengdu Xiling's position with international vehicle manufacturers while ensuring minimal disruption to existing projects and customer operations [2][3]. Group 2: Strategic Implications - Schaeffler's CEO, Klaus Rosenfeld, emphasized that this transaction is a significant step in streamlining the business portfolio post-Vitesco acquisition, with further actions expected to follow [3]. - The transaction is anticipated to finalize in the first half of 2026, subject to regulatory approval and mutual agreement between the parties [3]. Group 3: Restructuring Context - This divestment follows previous restructuring actions by Schaeffler, including the closure of two production sites in Austria and the UK, driven by a shift towards automatic transmissions in the automotive sector [4]. - The closure of the Sheffield clutch plant will result in production being transferred to Schaeffler's facilities in India and Hungary [4].

Summary of Conference Call Company Overview - The company is identified as Garrett, a technology company primarily involved in the automotive and transportation sectors, with a focus on turbocharger technology [2][3] - The company has approximately 192 million shares, trading around $17, with a market capitalization of about $3.3 billion and net debt of $1.2 billion, leading to a total enterprise value of approximately $4.5 billion [1] Financial Performance - The company reports adjusted EBIT margins of over 14% and adjusted EBITDA margins of 18%, indicating strong profitability [2] - The company generates significant free cash flow due to its aerospace-derived products [2] Market Position and Strategy - Garrett is a leading player in the turbocharger market, primarily competing with BorgWarner, and is described as the "last man standing" in turbo technology [3] - The company has a strong geographic sales distribution, with a significant focus on Europe due to stringent emission standards [3][4] - Turbo penetration rates are high in Europe (over 70%) compared to the U.S. (around 50%), with all diesel engines being turbocharged [4] Product Development and Innovation - Garrett has developed new zero-emission products based on its aerospace-derived intellectual property [5] - The company has a diverse product portfolio, including high-speed rotating machines, air and gas compression technologies, and fuel cell compressors [11][12] - The e-cooling compressor technology is highlighted for its potential applications beyond automotive, including HVAC systems for buildings [19] Growth Opportunities - The company sees growth in the commercial vehicle sector, particularly in backup power generation for data centers, and anticipates recovery in mining and agriculture [29] - There is a growing interest in e-boosting technologies and range-extended vehicles (REVs) in markets like China, which could drive demand for Garrett's products [17][18] - The company is well-positioned to benefit from the shift towards hybrid and plug-in hybrid vehicles, which typically have higher turbo penetration [39][40] Competitive Landscape - Garrett's strong balance sheet and financial stability are seen as advantages over smaller competitors, which may struggle with price increases and financial viability [9] - The company is actively monitoring the competitive landscape in China, where local OEMs are gaining market share [37] Regulatory Environment - The regulatory environment in Europe is evolving, with potential extensions to emission deadlines, which could favor Garrett's turbocharged products [39][40] Financial Discipline and R&D - The company maintains a financial framework that limits R&D spending to 5% of revenue, currently operating in the low 4% range [23] - Garrett has redirected excess cash from its turbo business to invest in new technologies without exceeding its R&D budget [24] Future Outlook - The company has set a target of $1 billion in sales from electric products by 2030, which may be conservative given the evolving market dynamics [53] - An investor day is planned for 2026 to provide updates on growth and strategic direction [54] Key Metrics - Free cash flow for the year is projected at $385 million, representing over 10% of the company's equity capitalization [51] This summary encapsulates the key points discussed during the conference call, highlighting Garrett's market position, financial performance, product innovation, growth opportunities, and strategic outlook.

Financial Data and Key Metrics Changes - The company reported sales of over $3.6 billion, which was relatively flat year over year, excluding foreign exchange impacts [22] - Adjusted operating margin was strong at 10.3%, despite a $15 million or 40 basis point net tariff headwind [23][25] - Free cash flow increased by 71% year over year to $507 million [23][25] - The company increased its full year sales guidance to a range of $14 billion to $14.4 billion, up from previous guidance of $13.6 billion to $14.2 billion [26] - Adjusted EPS is projected to be in the range of $4.45 to $4.65, an 8% increase from prior guidance [29] Business Line Data and Key Metrics Changes - Light vehicle e product sales increased by 31% year over year, driven by strong growth in Europe and Asia [22][24] - Organic sales were relatively flat year over year, with a decline in the commercial vehicle battery and charging systems segment impacting overall performance [8][22] - The company secured multiple new business awards across its portfolio, indicating strong demand for efficient powertrain technology [20] Market Data and Key Metrics Changes - The company expects a full year market assumption to be down 0.5% to 2.5%, an improvement from previous estimates of down 2% to 4% [28] - The guidance now assumes a full year sales benefit of $140 million from foreign currencies, a significant increase from prior estimates [27] Company Strategy and Development Direction - The company is focused on a balanced capital allocation approach, returning over $130 million to shareholders through dividends and share repurchases [9][33] - The Board approved a 55% increase in the quarterly cash dividend and an increase in share repurchase authorization to $1 billion, reflecting confidence in long-term cash generation [9][30] - The company aims to continue investing both organically and inorganically to support growth, with a disciplined approach to M&A opportunities [17][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term earnings power of the business, citing strong operational performance and cost controls [20][34] - The company anticipates continued outperformance of market production by 100 to 150 basis points [34] - Management acknowledged headwinds from the battery business but remains optimistic about long-term growth in that segment [102] Other Important Information - The company highlighted strong award activity in both foundational and e products, indicating robust demand for its technologies [10][20] - The company has returned over $3.5 billion to shareholders since 2020, demonstrating a commitment to shareholder value [16] Q&A Session Summary Question: Organic growth outlook and tariff impacts - Management noted that organic sales were impacted by lower battery sales, primarily in North America, and expected a full year headwind from the battery segment [38][40] Question: Capital allocation and cash levels - Management confirmed a liquidity target of 20% of sales and indicated that cash levels are currently higher, allowing for continued shareholder returns [45] Question: Margin conversion and guidance - Management explained that the strong conversion of sales to income is due to effective cost controls and productivity improvements [58][60] Question: Path to positive organic growth in foundational segments - Management expressed optimism about outgrowing the market in combustion and e products, citing increased RFQ activity and new program wins [62][64] Question: Battery business outlook and restructuring actions - Management indicated that the battery business is slightly EBITDA positive and cash flow breakeven, with actions taken to manage volatility [102] Question: Performance of PowerDrive segment - Management highlighted strong first half performance and indicated that the focus remains on outgrowing industry production while converting growth into income [104][106]

Core Insights - BorgWarner Inc. has reported a 1% increase in U.S. GAAP net sales for Q2 2025, reaching $3,638 million, with light vehicle eProduct sales growing by 31% year-over-year [6][7] - The company has increased its full-year 2025 guidance for net sales to a range of $14.0 billion to $14.4 billion, up from the previous range of $13.6 billion to $14.2 billion, driven by higher industry production expectations and favorable foreign exchange impacts [8][9] - BorgWarner's Board of Directors has authorized a 55% increase in its quarterly cash dividend per share and a $1 billion share repurchase program through 2028 [6][9] Financial Performance - U.S. GAAP net earnings for Q2 2025 were $224 million, or $1.03 per diluted share, compared to $315 million, or $1.39 per diluted share in Q2 2024 [7][16] - Adjusted net earnings per diluted share for Q2 2025 were $1.21, a 2% increase from $1.19 in Q2 2024, primarily due to a lower share count [7][8] - The company achieved a U.S. GAAP operating margin of 7.9% in Q2 2025, with an adjusted operating margin of 10.3% [6][9] Business Developments - BorgWarner secured multiple new business awards, including turbocharger and electric motor contracts with major global OEMs, expected to support long-term profitable growth [3][6] - Production for several new contracts is anticipated to begin between 2025 and 2028, indicating a strong pipeline for future revenue [6][9] Guidance and Expectations - The company expects its U.S. GAAP operating margin for 2025 to be in the range of 8.3% to 8.5%, with adjusted operating margin projected between 10.1% and 10.3% [9] - Net earnings for 2025 are expected to be in the range of $3.80 to $3.97 per diluted share, with adjusted net earnings projected between $4.45 and $4.65 per diluted share [9][8]

Summary of BorgWarner (BWA) Conference Call - June 10, 2025 Company Overview - **Company**: BorgWarner (BWA) - **Industry**: Automotive Powertrain and Electrification Key Points and Arguments Financial Performance - BorgWarner reported strong performance in Q1, outpacing end market growth with strong margins and free cash flow [2][3] - The company is focused on driving financial performance despite headwinds, including tariffs and customer demand uncertainties [3][5] Tariff Impact - The estimated gross impact of tariffs on sales is about 1.6%, which is better than previous estimates [4][30] - Tariffs are considered manageable, with the main concern being customer demand and production environment uncertainties [4][30] - BorgWarner is actively working to mitigate tariff impacts through compliance and sourcing strategies [26][52] Regional Market Trends - In China, NEVs (New Energy Vehicles) account for 50% of the market, with BorgWarner generating 20% of its revenue from this region [10][18] - The company has a strong customer base in China, with 75% of revenue coming from OEMs [11] - In Europe, electrification is growing but at a slower pace compared to China, with expectations of continued growth [12][39] Product Portfolio and Strategy - BorgWarner has a diversified product portfolio catering to combustion, hybrid, and electric vehicles [9][12] - The company aims to outgrow its end markets across both foundational and electrified businesses [42][61] - Recent decisions include exiting the EV charging business due to underperformance and consolidating North American battery systems [48][51] Capital Allocation and M&A Strategy - BorgWarner maintains a balanced capital allocation approach, focusing on dividends, share repurchases, and M&A opportunities [75][76] - The company has $1.7 billion in cash and projects generating $700 million in free cash flow [75] - M&A targets are evaluated based on industrial logic, near-term profitability, and proper valuation [77][82] Market Resilience and Future Outlook - BorgWarner's management expresses confidence in navigating market uncertainties, emphasizing the resilience of their business model [35][39] - The company expects to maintain margins in foundational businesses while pursuing growth in electrified products [64][66] Competitive Landscape - The automotive industry is expected to see consolidation, particularly among smaller players in the e-product segment [90][91] - BorgWarner is well-positioned to capitalize on opportunities arising from the weakening of smaller competitors [90][91] Additional Important Insights - The company is focused on operational excellence and cost management to remain competitive [55][56] - There is a strong emphasis on customer diversification, reducing dependency on any single customer [19][20] - The management team is experienced in navigating various market challenges, including tariffs and production volatility [35][36]