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- **Revenue Growth & Margin Expansion**: Q3 net sales up 6% to $902M, Adjusted EBIT margin of 14.7% (vs. 14.2% YoY), driven by gasoline share gains.
- **Zero-Emission Tech Breakthroughs**: $100M+ 2025 sales in stationary power, E-Cooling compressors showing 30% efficiency gains in industrial trials.
- **Capital Return Acceleration**: $84M Q3 buybacks, 33% dividend hike to $0.08/share, and $50M debt repayment reducing leverage.
- **Strategic Focus**: Balancing near-term mix headwinds with long-term growth in zero-emission technologies and industrial applications.

**【CEO Summary Section】**
- **Q3 2025 Financial Highlights**: Net sales of $902 million (+6% at constant currency), Adjusted EBIT of $133 million (14.7% margin), and $107 million in adjusted free cash flow.
- **Gasoline Sales Growth**: 10% YoY driven by share gains in China, Europe, India, and Brazil, outperforming the industry.
- **Zero-Emission Tech Progress**: Secured $40+ million in awards for stationary power gen sets (e.g., data center backup), with 2025 sales expected to exceed $100 million.
- **Capital Returns**: $84M share buybacks, $12M dividend paid, and a 33% dividend increase to $0.08 per share for Q4.

**【CFO Financial Commentary】**
- **Revenue Breakdown**: Gasoline (+9%), Diesel (+5%), offset by aftermarket weakness (-12%). Tariff recoveries added $12M to sales.
- **Margin Dynamics**: 14.7% EBIT margin (vs. 14.2% YoY), driven by productivity gains but offset by gasoline mix (600bps drag).
- **Liquidity & Debt**: $862M liquidity ($630M undrawn revolver), early $50M debt repayment reducing gross leverage.
- **Free Cash Flow**: $107M Q3, $264M YTD, targeting 75%+ of cash flow returned to shareholders.

**【Q&A Highlights】**
- **Sales Mix Challenges**: Gasoline growth (China) offsets lower-margin aftermarket and CV volumes, but mix impact expected to persist.
- **Zero-Emission Tech Path**: E-Powertrain first production in 2027, E-Cooling compressors showing 30%+ efficiency gains in industrial testing.
- **Diesel Recovery**: Europe/North America stabilization, but long-term focus on light commercial vehicles.
- **Capital Allocation**: Share buybacks ($136M YTD) and dividend growth (75%+ of cash flow) remain priorities, with debt repayment as market allows.

Garrett Motion Inc. (GTX) Q3 2025 Earnings Call Transcript

- **Q2 Financial Strength**: $913M net sales, $124M EBIT (13.6% margin), $121M free cash flow, and $1B+ program wins highlight robust execution.
- **Gasoline Growth**: 4% turbo sales beat industry, offsetting diesel weakness, with margin management via cost controls.
- **Zero-Emission Expansion**: New R&D center in China, $14M fuel cell award, and genset/marine turbo growth to $400M+ within 5 years.
- **Capital Return**: $52M YTD buybacks (39% share reduction) and $12M quarterly dividend reflect 75%+ free cash flow return target.
- **Outlook Adjustment**: 2025 outlook raised to $3.5B net sales, driven by FX and tariff recovery, with focus on maintaining operational flexibility.

**【Management Opening Remarks】**
- Cyril Grandjean welcomed participants and outlined the call's agenda, emphasizing forward-looking statements and non-GAAP measures. He highlighted the company's commitment to transparency and regulatory compliance.

**【CEO Summary Section】**
- **Financial Performance**: Q2 net sales of $913 million (flat at constant currency), with gasoline turbo sales up 4% vs. industry decline. Adjusted EBIT of $124 million (13.6% margin) and free cash flow of $121 million.
- **Strategic Wins**: Secured $1 billion in light vehicle turbo program extensions, including 3 China-based range-extended EV wins and a major E-Turbo program in Europe.
- **Zero-Emission Progress**: Launched new R&D center in China, secured $14 million in fuel cell compressor awards, and demonstrated E-Cooling outperformance in industrial cooling.
- **Shareholder Returns**: Repurchased $22 million in Q2, total $52 million YTD, reducing shares by 39% since Q1 2023. Dividend of $12 million paid quarterly.
- **Outlook Update**: Raised 2025 outlook to reflect stronger euro/dollar rate, with midpoints of $3.5B net sales and $500M adjusted EBIT.

**【CFO Financial Commentary】**
- **Net Sales**: $913M (+3% reported, flat constant currency), driven by gasoline growth (new launches, share gains) offset by diesel weakness and aftermarket softness.
- **EBIT Margin**: 13.6% (down 20bps vs. Q2 2024), impacted by unfavorable mix (gasoline margin < overall), tariffs ($14M recovery), and $11M FX benefit.
- **Cash Flow**: $121M free cash flow (98% Q2 conversion), with first-half 62% conversion. Liquidity of $862M supports $250M share repurchase program.
- **Outlook Details**: 2025 adjusted EBIT midpoints reflect 70bps FX improvement and 20bps tariff dilution. Free cash flow target of $370M.

**【Q&A Highlights】**
- **Sales Mix Management**: CEO emphasized variable cost control and fixed cost actions to mitigate lower-margin gasoline growth and aftermarket/diesel weakness.
- **Cash Deployment**: CFO noted non-linear buyback pace but reaffirmed 75%+ free cash flow return target. Q2 cash of $862M allows flexibility for block trades.
- **Tariff Recovery**: CEO confirmed full recovery of new tariffs, with tools in place to adapt to changing trade policies.
- **Genset Growth**: CEO projected genset/marine turbo business to reach hundreds of millions within 3-5 years, driven by data center backup power demand.
- **Share Repurchase Strategy**: CFO reiterated commitment to disciplined buybacks, balancing market conditions with capital allocation framework.

Garrett Motion Inc. (GTX) Q2 2025 Earnings Call Transcript

- **Q1 Strong Margins**: 14.9% EBIT margin (+170bps YoY) despite 4% sales decline, driven by 2024 cost savings.
- **Gasoline Growth**: +6% YoY in North America, offsetting diesel weakness. 2027 Hyundai e-motor deal signals EV tech leadership.
- **China Expansion**: Secured wins with leading EV makers; 20%+ market share in light commercial vehicles.
- **Resilient Cash Flow**: $36M free cash flow with no near-term debt maturities; $760M liquidity buffer.
- **Tariff Mitigation**: 100% pass-through; <20% sales exposure due to regional manufacturing strategy.

**【CEO Opening Remarks】**
- Q1 2025 net sales: $878M (down 4% YoY, 2% on constant currency). Gasoline applications grew 6% YoY, offsetting diesel softness in Europe.
- Adjusted EBIT: $131M (14.9% margin, +170bps YoY) driven by 2024 cost actions. Free cash flow: $36M (in line with expectations).
- 2025 outlook unchanged; 20% of sales in North America with regional manufacturing to mitigate tariffs.
- $30M share buyback and $12M dividend executed; 2nd dividend declared for June 2025.

**【CFO Financial Breakdown】**
- Gasoline growth (+6% YoY) in North America and Europe offset by diesel decline (-14% YoY) and lower commercial vehicle demand.
- EBIT margin expansion (+170bps YoY) due to $31M operating improvements, fully offsetting $4M tariff impact.
- Q1 free cash flow sequential decline due to working capital timing; expect recovery in H2.
- Liquidity: $760M (including $630M undrawn credit facility). Term loan refinanced to 2032; revolver expanded to $30M and extended to 2030.

**【Strategic Wins & Innovations】**
- 3 new China/NA wins for turbo-hybrid EVs; launches natural gas turbos for heavy trucks.
- Doubled industrial turbo share in Asia (data center infrastructure growth).
- Secured Hyundai's first series production award for high-speed e-motors (2027 launch for heavy-duty EVs).
- E-cooling compressor gains traction for EVs and industrial applications.

**【Q&A Highlights】**
- North America: Gasoline ramp-up in Q1, but commercial vehicle weakness offset gains. 2026-2027 hybrid demand could drive turbo growth.
- China: Leading EV manufacturers (BYD, Geely) adopting Garrett's hybrid turbo tech. 20%+ market share in light commercial vehicles.
- FX: €105/EUR guidance; €110/EUR would add ~$10M/QTR to revenue and EBIT.
- Tariffs: 100% pass-through to customers; $60M annualized impact if tariffs remain. <20% of sales exposed due to regional manufacturing.

Garrett Motion Inc. (GTX) Q1 2025 Earnings Call Transcript

- **Resilient Q4 Performance**: $153M EBITDA (18.1% margin) and $157M free cash flow, despite industry softness.
- **2025 Outlook**: Flat EBITDA at $575M (17.2% margin), with >50% R&D for zero-emission tech.
- **China Growth**: New partnerships with local EV players, with revenue ramping in 2026-2027.
- **Shareholder Returns**: $296M buybacks in 2024, +$250M program and $50M annual dividend in 2025.


**【CEO Opening Remarks】**
- Highlighted strong financial resilience in a challenging automotive industry environment.
- Noted stabilization of net sales in Q4 2024 ($844M) after 4 consecutive quarterly declines, driven by new program ramp-ups.
- Emphasized operational flexibility to respond to geopolitical and industry volatility, with a focus on zero-emission technologies.
- Announced a new $250M share repurchase program and $50M annual dividend starting in 2025.

**【CFO Financial Summary】**
- **Q4 2024 Results**: 
  - Adjusted EBITDA: $153M (vs. $145M in Q4 2023), margin of 18.1% (vs. 15.3% YoY).
  - Free Cash Flow: $157M (vs. $137M YoY), driven by EBITDA conversion and working capital improvements.
  - Full Year 2024 Adjusted EBITDA: $598M (down $37M YoY) with margin of 17.2% (up 90bps YoY).
- **2025 Outlook**: 
  - Net Sales: $3.4B (flat at constant currency vs. 2024).
  - Adjusted EBITDA: $575M (down $23M YoY) due to FX headwinds, with margin held flat at 17.2%.
  - Free Cash Flow: $345M (60% conversion of EBITDA).
  - R&D Spend: 4.6% of sales (up 10bps YoY), with >50% allocated to zero-emission technologies.

**【Q&A Key Takeaways】**
- **China Strategy**: Growing partnerships with local EV and plug-in hybrid manufacturers, with new business ramping in 2026-2027.
- **Geopolitical Risk Management**: Flexible supply chain and rapid customer engagement to mitigate tariffs and trade disruptions.
- **M&A Approach**: High bar for acquisitions; prioritizing organic growth in turbo and zero-emission solutions.
- **Free Cash Flow Definition**: Operating cash flow - CapEx, excluding one-time charges and receivables factoring benefits.


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