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 [23] - Adjusted operating margin was strong at 10.3%, despite a 40 basis point headwind from tariffs [24][26] - Free cash flow increased by 71% year over year, reaching $507 million [24][26] - 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 [27] Business Line Data and Key Metrics Changes - Light vehicle e product sales increased by 31% year over year, significantly outpacing the overall market growth [6][23] - Organic sales were relatively flat year over year, but excluding the decline in the commercial vehicle battery and charging systems segment, organic sales were up modestly [7][23] - The company secured multiple new business awards across its product lines, indicating strong demand for efficient powertrain technology [21][22] Market Data and Key Metrics Changes - The company expects a market production decline of 0.5% to 2.5% for the year, an improvement from previous estimates of a decline of 2% to 4% [29] - The full year sales outgrowth is projected to be approximately 100 to 150 basis points above market production [29] Company Strategy and Development Direction - The company is focused on a balanced capital allocation strategy, returning over $130 million to shareholders through dividends and share repurchases [8][21] - A 55% increase in the quarterly cash dividend and an increase in share repurchase authorization to $1 billion were approved, reflecting confidence in long-term cash generation [8][33] - The company aims to continue investing both organically and inorganically to support growth, with a disciplined approach to M&A opportunities [18][19] 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 [21][33] - The company anticipates continued strong performance in the second half of the year, with expectations for margin stability despite tariff headwinds [34][35] - Management highlighted the importance of outgrowing market production by 100 to 150 basis points and maintaining a focus on improving long-term positioning [35] Other Important Information - The company has returned over $3.5 billion of capital to shareholders since 2020 [16] - The management emphasized the importance of leveraging core competencies in evaluating M&A opportunities [19][90] Q&A Session Summary Question: Organic growth outlook and tariff impacts - Management noted that organic sales increased modestly when excluding the battery segment, with a headwind from lower battery sales primarily in North America [40] - For the full year, the battery segment is expected to contribute a 100 basis point headwind to overall growth [41] Question: Capital allocation and cash levels - The company maintains a liquidity target of 20% of sales and is currently above that level, allowing for consistent cash returns to shareholders [46] 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] Question: Performance of foundational segments - Management acknowledged the challenges in the combustion market but expressed optimism about future growth opportunities in hybrid and electric segments [62][63] Question: Battery business outlook - The battery business is currently slightly EBITDA positive and cash flow breakeven, with management confident in its long-term growth potential despite current headwinds [103] Question: RFQ activity and hybrid market - There has been a significant increase in RFQ activity for advanced hybrids, indicating strong future demand [106]

Core Insights - Garrett Motion Inc. has been added to the Russell 2000® Index, effective June 27, 2025, reflecting the company's growth and market position in automotive technology [1][2] - The addition to the index signifies Garrett's advancements in turbo technologies and its commitment to zero-emission mobility solutions [2] - Membership in the Russell 2000® Index is based on inclusion in the broader Russell 3000® Index, which is widely utilized by investment managers and institutional investors [2] Company Overview - Garrett Motion has a 70-year history in the automotive sector, focusing on innovation in turbocharging and differentiated technology solutions [5][6] - The company operates five R&D centers and 13 manufacturing facilities, employing over 9,000 people across more than 20 countries [6] - Garrett is actively developing technologies for Zero Emission Vehicles, including fuel cell compressors and electric propulsion systems [5][6]