Financial Data and Key Metrics Changes - Nexteer achieved record first half revenue of $2,200,000,000, increasing by 6.8% compared to the prior year [25][27] - EBITDA grew year over year by 16.8%, with margins expanding by 90 basis points [26][33] - Net profit reached $63,000,000, which is four times higher year over year, with margins improving by 210 basis points [27][33] - Free cash flow for 2025 was positive at $37,000,000, compared to a slight cash use last year [28][41] Business Line Data and Key Metrics Changes - In the first half, Nexteer launched 31 new programs, with 23 representing new or conquest businesses [6][9] - The company secured $1,500,000,000 in new business bookings, with nearly 40% coming from Chinese OEMs [12][14] - 69% of bookings were in the EPS product line, with 47% secured in the APAC region [14][30] Market Data and Key Metrics Changes - APAC revenue increased by 17%, outperforming the market by 9%, driven by significant new and conquest program launches with Chinese OEMs [30][31] - North America revenue was $1,138,000,000, which is 1.7% higher than last year [31] - EMEA revenue increased by 9.4%, reflecting improved operating efficiency and revenue growth [32][38] Company Strategy and Development Direction - Nexteer is focused on technology leadership and operational efficiency, with a commitment to expanding its manufacturing footprint and enhancing supply chain resilience [7][8] - The company is investing in motion by wire technologies, including steer by wire and brake by wire, to align with industry megatrends [15][19] - Strategic expansions in Changshu and Riozhou are aimed at meeting growing demand and enhancing operational efficiencies [23][24] Management's Comments on Operating Environment and Future Outlook - Management expects to achieve the full year booking target of $5,000,000,000, despite a flat forecast for global OEM production volumes [42] - The company is closely monitoring the U.S. tariff environment and geopolitical tensions that may impact production volumes [42][43] - Management remains optimistic about the adoption of steer by wire technology in the Chinese market, anticipating significant growth opportunities [53] Other Important Information - Nexteer is committed to becoming tariff cost neutral by working collaboratively with customers and suppliers to mitigate tariff impacts [62][64] - The company has introduced the Motion IQ software suite to enhance vehicle dynamics and streamline development processes for OEMs [21][70] Q&A Session Summary Question: Booking slowdown in North America - Management noted that bookings depend on customer product planning cycles, and while there was a slowdown, they remain confident in achieving the annual booking goal of $5,000,000,000 [48][50] Question: Adoption of BiWire technology in China - Management expressed optimism about the increasing interest and adoption of steer by wire technology among Chinese OEMs, with expectations for significant growth in the coming years [52][53] Question: Delays in EV program launches in the U.S. - Management acknowledged some delays in EV program development in North America but emphasized that their products are compatible with various powertrains, allowing them to capture market share [56][58] Question: Guidance on tariff impact and restructuring costs - Management confirmed that the net tariff costs incurred in the first half were not fully passed through to customers and outlined plans to mitigate these costs in the second half [62][64][66]
NEXTEER(01316) - 2025 Q2 - Earnings Call Transcript