Garrett Motion (US:GTX)2022-04-28 15:21Financial Data and Key Metrics Changes - In Q1 2022, net sales were $901 million, down 10% on a GAAP basis and 6% on a constant currency basis compared to the previous year [12][44] - Adjusted EBITDA was $146 million, resulting in an adjusted EBITDA margin of 16.2%, down from 17.7% in Q1 2021 but up from Q4 2021 [13][26] - The net debt to consolidated EBITDA ratio improved to 1.88 times from 1.95 times in Q4 2021 [16][36] Business Line Data and Key Metrics Changes - Gasoline product sales decreased 5% at constant currency, diesel product sales decreased 14%, and commercial vehicle sales decreased 7% compared to the previous year [28] - Aftermarket off-highway demand grew 19% year-over-year at constant currency, representing 12% of total sales [29] Market Data and Key Metrics Changes - The ongoing semiconductor shortage and supply chain challenges impacted vehicle production globally, particularly in China [12][58] - The overall foreign exchange impact reduced Q1 2022 sales by $36 million due to a weaker Euro [29] Company Strategy and Development Direction - The company plans to invest 50% of its 2022 R&D spend into new non-car turbo technologies and has opened additional electric lab capabilities [21] - The first commercial launch of E-Turbo technology on the Mercedes-AMG SL 43 was highlighted as a significant advancement [18] Management's Comments on Operating Environment and Future Outlook - Management noted that the current automotive supply chain challenges do not affect the strong underlying pent-up demand for light vehicles [45] - The revised 2022 outlook reflects lower global light vehicle automotive production due to supply chain constraints and a weaker Euro, with an expectation of flat production compared to 2021 [37][39] Other Important Information - The company ended Q1 2022 with $788 million in total liquidity, up from $720 million in the previous quarter [47] - The company repurchased 50,000 common shares and 197,000 Series A preferred shares, totaling $21 million in equity repurchases since Q4 2021 [36] Q&A Session Summary Question: How many units were sold this past quarter? - Approximately 3.4 million turbo units were sold [51] Question: Are customer ordering habits different now compared to 2021? - Demand volatility has returned to levels similar to Q3 2021, primarily driven by semiconductor shortages [53][58] Question: Is the weaker Euro changing R&D investment plans? - R&D investments remain unchanged globally, focusing on capabilities and expertise despite the weaker Euro [59] Question: Comments on buyback timing and pace? - Buyback pace slowed due to entering a blackout period after Q1 earnings, with future decisions dependent on cash flow developments [63] Question: Any plans for an Investor Day? - The company is considering an Investor Day and will communicate details once finalized [65]