Garrett Motion (GTX)2025-05-01 13:32Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $878 million, slightly down year over year, but outperforming the industry in light vehicle turbo sales, with gasoline applications growing by 6% [7][14] - Adjusted EBIT was $131 million, with an adjusted EBIT margin of 14.9%, up 170 basis points compared to Q1 2024 [8][14] - Adjusted free cash flow was $36 million, in line with expectations for the quarter [8][18] Business Line Data and Key Metrics Changes - Net sales decreased by $37 million year over year, down 4% on a reported basis and 2% on a constant currency basis, with strong growth in gasoline applications offset by diesel softness [16] - Commercial vehicle and aftermarket applications saw lower demand, contributing to the overall sales decline [16] Market Data and Key Metrics Changes - The company has a well-balanced sales split across geographies, with only 20% of sales in North America [9] - Foreign exchange impacts resulted in a $21 million or 2% sales decline, primarily due to a weaker euro [16] Company Strategy and Development Direction - The company aims to identify unmet customer needs and leverage innovation capabilities to develop differentiated solutions at scale [22] - There is a focus on strengthening leadership in the turbo industry while developing new zero-emission and turbo technologies [22] Management Comments on Operating Environment and Future Outlook - Management remains cautious about the impact of tariffs on demand forecasts but has not noticed any material impact so far [8][21] - The 2025 outlook remains unchanged, with net sales expected to be $3.4 billion and adjusted EBIT of $457 million [21] Other Important Information - The company repurchased $30 million of common stock and paid a $12 million quarterly dividend [11][20] - A significant milestone was reached with the first series production award from Hyundai for high-speed technologies [12][24] Q&A Session Summary Question: Comments on North America sales dynamics - Management noted that gasoline sales are ramping up, but there are offsets in commercial vehicle and aftermarket segments that were slightly down [26] Question: Opportunities in gasoline for 2026 and 2027 - Management sees significant opportunities in North America, particularly with carmakers pivoting to hybrids and range-extended electric vehicles [28] Question: Market share in China and EV trends - Management feels positive about market share in China, highlighting strong demand for differentiated technology from both traditional and new carmakers [30][32] Question: Guidance on euro assumptions - Management indicated that if the euro remains above 1.1, there would be favorable impacts on revenue and EBITDA, but guidance remains unchanged for now [33] Question: Exposure to North American tariffs - Management estimates around $60 million in tariffs could be passed through, emphasizing limited exposure from Europe due to regional manufacturing [34][35]