BorgWarner Reports Full Year 2023 Results, Expects 2024 eProduct Sales to Grow Approximately 25% to 40%
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Insights
An examination of BorgWarner Inc.'s financial results reveals several key points of interest for stakeholders. The reported 6.2% increase in Q4 net sales and a 12.4% increase for the full year indicate a robust demand for the company's products. This is particularly noteworthy given the competitive nature of the automotive parts industry. The company's ability to achieve organic sales growth of 4.4% in Q4 and 12.5% for the full year, despite the exclusion of foreign currency impacts and M&A activities, suggests a strong underlying business performance.
From a cash flow perspective, BorgWarner's free cash flow of $679 million in Q4 and $565 million for the full year is a testament to its operational efficiency and financial health. The emphasis on eProduct sales, which are expected to rise from approximately $2.0 billion in 2023 to between $2.5 billion and $2.8 billion in 2024, underscores the company's strategic pivot towards electrification—a critical growth area in the automotive industry.
The guidance for 2024, with net sales projected between $14.4 billion and $14.9 billion, reflects cautious optimism. The expected operating margin of 8.5% to 8.9% and adjusted operating margin of 9.2% to 9.6% suggest that BorgWarner is anticipating maintaining profitability while investing in growth areas such as eMobility. These margins are particularly relevant when compared to industry benchmarks, as they can indicate the company's competitive position and operational effectiveness.
Looking at BorgWarner's strategic partnerships and acquisition, the collaboration with FinDreams Battery and the joint venture with Shaanxi Fast Auto Drive Group are significant developments. These alliances are set to bolster BorgWarner's presence in the electric commercial vehicle market, a segment that is expected to grow substantially in the coming years. The exclusive rights to localize LFP battery packs in multiple regions could provide BorgWarner with a competitive edge in the supply chain for electric commercial vehicles.
The acquisition of Eldor Corporation's Electric Hybrid Systems business segment is another strategic move that enhances BorgWarner's ePropulsion portfolio. This expansion in high-voltage power electronics is crucial as the automotive industry continues to shift towards electric and hybrid vehicles. The ability to offer a comprehensive suite of eMobility solutions can potentially open up new markets and customer segments for BorgWarner.
Furthermore, the contracts with a major global OEM and Xpeng Motors for the supply of high voltage coolant heaters and eMotor components, respectively, reflect the company's growing influence in the electric vehicle (EV) components market. These contracts not only contribute to revenue but also solidify BorgWarner's position as a key player in the EV supply chain.
BorgWarner's focus on eMobility is strategically aligned with current automotive industry trends towards electrification. The transition to electric and hybrid vehicles is a global movement, with governments and consumers increasingly pushing for cleaner transportation options. BorgWarner's emphasis on developing high-voltage inverters and battery packs for commercial vehicles is particularly relevant, as this sector is poised for significant growth due to the need for sustainable freight and delivery solutions.
The company's ability to secure contracts for supplying components to electric light-vehicle platforms, including trucks and SUVs, indicates its adaptability to changing market demands. With the automotive industry facing a paradigm shift, BorgWarner's strategic investments and product development efforts appear well-positioned to capitalize on new opportunities within the eMobility space.
The mention of blade cells in the strategic relationship with FinDreams Battery is noteworthy, as this technology is gaining traction for its potential benefits in energy density and safety. BorgWarner's involvement with blade cell technology could signal its commitment to leading-edge solutions in the electric battery domain, which may be a critical differentiator in the competitive landscape.
Charging Forward Update:
- BorgWarner has announced a strategic relationship agreement with FinDreams Battery, a subsidiary of BYD Company Limited. Under this agreement, BorgWarner will be the only non-OEM localized manufacturer, unaffiliated with FinDreams Battery, with rights to localize LFP battery packs for commercial vehicles utilizing FinDreams Battery blade cells in
Europe , theAmericas , and select regions ofAsia Pacific . - BorgWarner has announced a joint venture with Shaanxi Fast Auto Drive Group to develop a high-voltage inverter application for the Chinese electric commercial vehicle market. This high-voltage inverter for commercial vehicles is expected to strengthen BorgWarner's commercial vehicle product portfolio.
- BorgWarner has completed its acquisition of the Electric Hybrid Systems business segment of Eldor Corporation ("Eldor"). The acquisition is an important complement to the ePropulsion portfolio, especially as it relates to expansion in high-voltage power electronics beyond the inverter.
- BorgWarner announced multiple new eProduct awards including:
- A contract with a major global OEM to extend its existing business supplying 400V high voltage coolant heaters (HVCH) for the automaker's battery-electric light-vehicle platforms, specifically truck and SUV programs.
- A contract with Xpeng Motors, a leading Chinese Smart EV company to supply its eMotor rotor and stator for the X9 MPV as well as XPeng's next electric B-class sedan.
- A contract with a major Chinese OEM to supply its 90kW boost dual inverter on a series of the automaker's plug-in hybrid (PHEV) and range extended (REEV) electric vehicle passenger car platforms.
Fourth Quarter Highlights (continuing operations basis):
U.S. GAAP net sales of$3,522 million 6.2% compared with fourth quarter 2022.- Excluding the impact of foreign currencies and the net impact of net M&A, organic sales were up
4.4% compared with fourth quarter 2022.
- Excluding the impact of foreign currencies and the net impact of net M&A, organic sales were up
U.S. GAAP net earnings of$0.64 - Excluding the
$0.26 $0.90
- Excluding the
U.S. GAAP operating income of$281 million 8.0% of net sales.- Excluding
$51 million $332 million 9.4% of net sales.
- Excluding
- Net cash provided by operating activities of
$887 million - Free cash flow of
$679 million
- Free cash flow of
Full Year Highlights (continuing operations basis):
U.S. GAAP net sales of$14,198 million 12.4% when compared with 2022.- Excluding the impact of foreign currencies and the net impact of M&A, organic sales were up
12.5% compared with 2022.
- Excluding the impact of foreign currencies and the net impact of M&A, organic sales were up
U.S. GAAP net earnings of$2.70 - Excluding
$1.05 $3.75
- Excluding
U.S. GAAP operating income of$1,160 million 8.2% of net sales.- Excluding
$198 million $1,358 million 9.6% of net sales.
- Excluding
- Net cash provided by operating activities of
$1,397 million - Free cash flow of
$565 million
- Free cash flow of
Financial Results (continuing operations basis):
The Company believes the following table is useful in highlighting non-comparable items that impacted its
Three Months Ended December 31, | Year Ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Earnings per diluted share | $ 0.64 | $ 0.73 | $ 2.70 | $ 2.69 | |||
Non-comparable items: | |||||||
Merger and acquisition expense, net | 0.01 | (0.01) | 0.09 | 0.03 | |||
Restructuring expense | 0.04 | (0.02) | 0.24 | 0.15 | |||
Asset impairments and lease modification | 0.07 | 0.13 | 0.10 | 0.13 | |||
Gain on debt extinguishment | — | — | (0.09) | — | |||
Loss (gain) on sale of business | — | 0.01 | (0.02) | (0.04) | |||
Gain on sale of assets | — | — | (0.04) | — | |||
Other non-comparable items | 0.01 | — | 0.07 | — | |||
Realized and unrealized loss on debt and equity securities | 0.18 | 0.14 | 0.73 | 0.25 | |||
Corporate synergy from spin-off | — | 0.02 | 0.02 | 0.06 | |||
Tax adjustments | (0.05) | (0.06) | (0.05) | (0.10) | |||
Adjusted earnings per diluted share | $ 0.90 | $ 0.94 | $ 3.75 | $ 3.17 | |||
Net sales were
Full Year 2024 Guidance: The Company has provided 2024 full year guidance. Net sales are expected to be in the range of
Operating margin is expected to be in the range of
At 9:30 a.m. ET today, a brief conference call concerning fourth quarter and full year 2023 results and 2024 guidance will be webcast at: https://www.borgwarner.com/investors. Additionally, an earnings call presentation will be available at https://www.borgwarner.com/investors.
For more than 130 years, BorgWarner Inc. (NYSE: BWA) has been a transformative global product leader bringing successful mobility innovation to market. Today, we're accelerating the world's transition to eMobility -- to help build a cleaner, healthier, safer future for all.
Forward Looking Statements: This press release may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act that are based on management's current outlook, expectations, estimates and projections. Words such as "anticipates," "believes," "continues," "could," "designed," "effect," "estimates," "evaluates," "expects," "forecasts," "goal," "guidance," "initiative," "intends," "may," "outlook," "plans," "potential," "predicts," "project," "pursue," "seek," "should ," "target," "when," "will," "would," and variations of such words and similar expressions are intended to identify such forward-looking statements. Further, all statements, other than statements of historical fact, contained or incorporated by reference in this press release that we expect or anticipate will or may occur in the future regarding our financial position, business strategy and measures to implement that strategy, including changes to operations, competitive strengths, goals, expansion and growth of our business and operations, plans, references to future success and other such matters, are forward-looking statements. Accounting estimates, such as those described under the heading "Critical Accounting Policies and Estimates" in Item 7 of our most recently filed Annual Report on Form 10-K ("Form 10-K"), are inherently forward-looking. All forward-looking statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. Forward-looking statements are not guarantees of performance, and the Company's actual results may differ materially from those expressed, projected or implied in or by the forward-looking statements.
You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Forward-looking statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed, projected or implied in or by the forward-looking statements. These risks and uncertainties, among others, include: supply disruptions impacting us or our customers, such as the current shortage of semiconductor chips that has impacted original equipment manufacturer ("OEM") customers and their suppliers, including us; commodity availability and pricing, and an inability to achieve expected levels of recoverability in commercial negotiations with customers concerning these costs; competitive challenges from existing and new competitors including OEM customers; the challenges associated with rapidly changing technologies, particularly as they relate to electric vehicles, and our ability to innovate in response; the difficulty in forecasting demand for electric vehicles and our electric vehicles revenue growth; disruptions in the global economy caused by wars, including the wars in
BorgWarner Inc. | |||||||
Condensed Consolidated Statements of Operations (Unaudited) | |||||||
(in millions, except per share amounts) | |||||||
Three Months Ended | Year Ended | ||||||
December 31, | December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Net sales | $ 3,522 | $ 3,317 | $ 14,198 | $ 12,635 | |||
Cost of sales | 2,863 | 2,678 | 11,630 | 10,266 | |||
Gross profit | 659 | 639 | 2,568 | 2,369 | |||
Gross margin | 18.7 % | 19.3 % | 18.1 % | 18.7 % | |||
Selling, general and administrative expenses | 353 | 339 | 1,316 | 1,290 | |||
Restructuring expense | 11 | 6 | 79 | 48 | |||
Other operating expense, net | 14 | 29 | 13 | 22 | |||
Operating income | 281 | 265 | 1,160 | 1,009 | |||
Equity in affiliates' earnings, net of tax | (7) | (7) | (30) | (28) | |||
Realized and unrealized loss on debt and equity securities | 45 | 46 | 174 | 73 | |||
Interest expense, net | 7 | 10 | 10 | 51 | |||
Other postretirement expense | 7 | 2 | 15 | — | |||
Earnings from continuing operations before income taxes and | 229 | 214 | 991 | 913 | |||
Provision for income taxes | 59 | 18 | 289 | 195 | |||
Net earnings from continuing operations | 175 | 196 | 702 | 718 | |||
Net earnings (loss) from discontinued operations | 5 | 82 | (7) | 308 | |||
Net earnings | 175 | 278 | 702 | 1,026 | |||
Net earnings from continuing operations attributable to the noncontrolling | 21 | 24 | 70 | 82 | |||
Net earnings attributable to BorgWarner Inc. | $ 154 | $ 254 | $ 625 | $ 944 | |||
Amounts attributable to BorgWarner Inc.: | |||||||
Net earnings from continuing operations | 149 | 172 | 632 | 636 | |||
Net earnings (loss) from discontinued operations | 5 | 82 | (7) | 308 | |||
Net earnings attributable to BorgWarner Inc. | $ 154 | $ 254 | $ 625 | $ 944 | |||
Earnings per share from continuing operations — diluted | 0.64 | 0.73 | 2.70 | 2.69 | |||
Earnings per share from discontinued operations — diluted | 0.02 | 0.36 | (0.03) | 1.30 | |||
Earnings per share attributable to BorgWarner Inc. — diluted | $ 0.66 | $ 1.09 | $ 2.67 | $ 3.99 | |||
Weighted average shares outstanding — diluted | 233.6 | 234.5 | 234.4 | 236.8 | |||
BorgWarner Inc. | |||||||
Net Sales by Reporting Segment (Unaudited) | |||||||
(in millions) | Three Months Ended | Year Ended | |||||
December 31, | December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Air Management | $ 1,882 | $ 1,809 | $ 7,833 | $ 7,137 | |||
Drivetrain & Battery Systems | 1,130 | 990 | 4,348 | 3,735 | |||
ePropulsion | 542 | 545 | 2,166 | 1,906 | |||
Inter-segment eliminations | (32) | (27) | (149) | (143) | |||
Net sales | $ 3,522 | $ 3,317 | $ 14,198 | $ 12,635 | |||
Segment Adjusted Operating Income (Loss) (Unaudited) | |||||||
(in millions) | |||||||
Three Months Ended | Year Ended | ||||||
December 31, | December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Air Management | $ 287 | $ 280 | $ 1,171 | $ 1,073 | |||
Drivetrain & Battery Systems | 145 | 119 | 545 | 449 | |||
ePropulsion | (16) | 1 | (90) | (88) | |||
Segment Adjusted Operating Income | 416 | 400 | 1,626 | 1,434 | |||
Corporate, including stock-based compensation | 84 | 84 | 278 | 282 | |||
Restructuring expense | 11 | 6 | 79 | 48 | |||
Intangible asset amortization | 16 | 17 | 67 | 69 | |||
Merger and acquisition expense, net | 1 | (4) | 23 | 9 | |||
Asset impairments and lease modifications | 18 | 30 | 29 | 30 | |||
Loss (gain) on sale of business | — | 2 | (5) | (13) | |||
Gain on sale of assets | — | — | (13) | — | |||
Other non-comparable items | 5 | — | 8 | — | |||
Equity in affiliates' earnings, net of tax | (7) | (7) | (30) | (28) | |||
Realized and unrealized loss on debt and equity securities | 45 | 46 | 174 | 73 | |||
Interest expense, net | 7 | 10 | 10 | 51 | |||
Other postretirement expense (income) | 7 | 2 | 15 | — | |||
Earnings from continuing operations before income taxes and | 229 | 214 | 991 | 913 | |||
Provision for income taxes | 59 | 18 | 289 | 195 | |||
Net earnings from continuing operations | 170 | 196 | 702 | 718 | |||
Net earnings from continuing operations attributable to the noncontrolling | 21 | 24 | 70 | 82 | |||
Net earnings from continuing operations attributable to BorgWarner Inc. | $ 149 | $ 172 | $ 632 | $ 636 | |||
BorgWarner Inc. | |||
Condensed Consolidated Balance Sheets (Unaudited) | |||
(in millions) | |||
December 31, | December 31, | ||
ASSETS | |||
Cash, cash equivalents and restricted cash | $ 1,534 | $ 1,083 | |
Receivables, net | 3,109 | 2,471 | |
Inventories, net | 1,313 | 1,217 | |
Prepayments and other current assets | 261 | 230 | |
Current assets of discontinued operations | — | 1,616 | |
Total current assets | 6,217 | 6,617 | |
Property, plant and equipment, net | 3,783 | 3,426 | |
Other non-current assets | 4,453 | 4,905 | |
Non-current assets of discontinued operations | — | 2,046 | |
Total assets | $ 14,453 | $ 16,994 | |
LIABILITIES AND EQUITY | |||
Notes payable and other short-term debt | $ 73 | $ 60 | |
Accounts payable | 2,546 | 2,146 | |
Other current liabilities | 1,148 | 1,084 | |
Current liabilities of discontinued operations | — | 946 | |
Total current liabilities | 3,767 | 4,236 | |
Long-term debt | 3,707 | 4,140 | |
Other non-current liabilities | 913 | 1,110 | |
Non-current liabilities of discontinued operations | — | 295 | |
Total liabilities | 8,387 | 9,486 | |
Total BorgWarner Inc. stockholders' equity | 5,828 | 7,224 | |
Noncontrolling interest | 238 | 284 | |
Total equity | 6,066 | 7,508 | |
Total liabilities and equity | $ 14,453 | $ 16,994 | |
BorgWarner Inc. | |||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||
(in millions) | Year Ended | ||
December 31, | |||
2023 | 2022 | ||
OPERATING ACTIVITIES OF CONTINUING OPERATIONS | |||
Net cash provided by operating activities from continuing operations | $ 1,397 | $ 1,180 | |
INVESTING ACTIVITIES OF CONTINUING OPERATIONS | |||
Capital expenditures, including tooling outlays | (832) | (622) | |
Payments for businesses acquired, net of cash and restricted cash acquired | (109) | (312) | |
Proceeds from settlement of net investment hedges, net | 25 | 40 | |
Proceeds from (payments for) investments in debt and equity securities, net | 284 | (473) | |
Proceeds from sale of businesses, net of cash divested | 9 | 27 | |
Proceeds from asset disposals and other, net | 30 | 20 | |
Net cash used in investing activities from continuing operations | (593) | (1,320) | |
FINANCING ACTIVITIES OF CONTINUING OPERATIONS | |||
Additions to debt | 18 | 5 | |
Repayments of debt, including current portion | (451) | (13) | |
Payments for debt issuance costs | (3) | — | |
Payments for purchase of treasury stock | (177) | (240) | |
Payments for stock-based compensation items | (25) | (18) | |
Payments for contingent consideration | (23) | — | |
Purchase of noncontrolling interest | (15) | (56) | |
Net distribution from PHINIA | 401 | — | |
Dividends paid to BorgWarner stockholders | (130) | (161) | |
Dividends paid to noncontrolling stockholders | (116) | (81) | |
Net cash used in financing activities from continuing operations | (521) | (564) | |
CASH FLOWS FROM DISCONTINUED OPERATIONS | |||
Operating activities of discontinued operations | (85) | 390 | |
Investing activities of discontinued operations | (86) | (99) | |
Financing activities of discontinued operations | 84 | (3) | |
Net cash (used in) provided by discontinued operations | (87) | 288 | |
Effect of exchange rate changes on cash | — | (90) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 196 | (506) | |
Cash, cash equivalents and restricted cash at beginning of year | 1,338 | 1,844 | |
Cash, cash equivalents and restricted cash at end of year | $ 1,534 | $ 1,338 | |
Less: Cash, cash equivalents and restricted cash of discontinued operations at end of year | $ — | $ 255 | |
Cash, cash equivalents and restricted cash of continuing operations at end of year | $ 1,534 | $ 1,083 | |
Supplemental Financial Information (Unaudited) | |||
(in millions) | Year Ended | ||
December 31, | |||
2023 | 2022 | ||
Depreciation and tooling amortization | $ 515 | $ 483 | |
Intangible asset amortization | $ 67 | $ 69 | |
Non-GAAP Financial Measures
This press release contains information about BorgWarner's financial results that is not presented in accordance with accounting principles generally accepted in
Management believes that these non-GAAP financial measures are useful to management, investors, and banking institutions in their analysis of the Company's business and operating performance. Management also uses this information for operational planning and decision-making purposes.
Non-GAAP financial measures are not and should not be considered a substitute for any GAAP measure. Additionally, because not all companies use identical calculations, the non-GAAP financial measures as presented by BorgWarner may not be comparable to similarly titled measures reported by other companies.
Adjusted Operating Income and Adjusted Operating Margin
The Company defines adjusted operating income as operating income adjusted to exclude the impact of restructuring expense, merger, acquisition and divestiture expense, intangible asset amortization expense, other net expenses, discontinued operations, and other gains and losses not reflective of the Company's ongoing operations. Adjusted operating margin is defined as adjusted operating income divided by net sales.
Adjusted Net Earnings
The Company defines adjusted net earnings as net earnings attributable to BorgWarner Inc. adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations, and other gains and losses not reflective of the Company's ongoing operations, and related tax effects. The impact of intangible asset amortization expense continues to be included in adjusted net earnings.
Adjusted Earnings per Diluted Share
The Company defines adjusted earnings per diluted share as earnings per diluted share adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations, and other gains and losses not reflective of the Company's ongoing operations, and related tax effects. The impact of intangible asset amortization expense continues to be included in adjusted earnings per share.
Free Cash Flow
The Company defines free cash flow as net cash provided by operating activities minus capital expenditures, and it is useful to both management and investors in evaluating the Company's ability to service and repay its debt.
Organic Net Sales Change
The Company defines organic net sales changes as net sales change year over year excluding the estimated impact of foreign exchange (FX) and the acquisitions of Santroll's light vehicle eMotor business, Rhombus Energy Solutions, Drivetek, the electric vehicle solution, smart grid and smart energy businesses of Hubei Surpass Sun Electric and the Electric Hybrid Systems business segment of Eldor Corporation.
Adjusted Operating Income and Adjusted Operating Margin (Unaudited) | |||||||
Three Months Ended | Year Ended | ||||||
December 31, | December 31, | ||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | |||
Net sales | $ 3,522 | $ 3,317 | |||||
Operating income | 281 | 265 | 1,160 | 1,009 | |||
Operating margin | 8.0 % | 8.0 % | 8.2 % | 8.0 % | |||
Non-comparable items: | |||||||
Restructuring expense | $ 11 | $ 6 | $ 79 | $ 48 | |||
Intangible asset amortization | 16 | 17 | 67 | 69 | |||
Merger and acquisition expense, net | 1 | (4) | 23 | 9 | |||
Asset impairments and lease modifications | 18 | 30 | 29 | 30 | |||
Loss (gain) on sale of business | — | 2 | (5) | (13) | |||
Gain on sale of assets | — | — | (13) | — | |||
Corporate synergy from spin-off | — | 5 | 10 | 20 | |||
Other non-comparable items | 5 | — | 8 | — | |||
Net non-comparable items | $ 51 | $ 56 | $ 198 | $ 163 | |||
Adjusted operating income | $ 332 | $ 321 | $ 1,358 | $ 1,172 | |||
Adjusted operating margin | 9.4 % | 9.7 % | 9.6 % | 9.3 % | |||
Free Cash Flow Reconciliation (Unaudited) | |||||||
Three Months Ended | Year Ended December | ||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | |||
Net cash provided by operating activities from continuing operations | $ 887 | $ 628 | $ 1,397 | $ 1,180 | |||
Capital expenditures, including tooling outlays | (208) | (195) | (832) | (622) | |||
Free cash flow | $ 679 | $ 433 | $ 565 | $ 558 | |||
Fourth Quarter 2023 Organic Net Sales Change (Unaudited) | |||||||||||
(in millions) | Q4 2022 Net | FX | Acquisition | Organic Net | Q4 2023 Net | Organic Net | |||||
Air Management | $ 1,809 | $ 38 | $ 2 | $ 33 | $ 1,882 | 1.8 % | |||||
Drivetrain & Battery Systems | 990 | 14 | — | 126 | 1,130 | 12.7 % | |||||
ePropulsion | 545 | 3 | 3 | (9) | 542 | (1.7) % | |||||
Inter-segment eliminations | (27) | — | — | (5) | (32) | 18.5 % | |||||
Net sales | $ 3,317 | $ 55 | $ 5 | $ 145 | $ 3,522 | 4.4 % | |||||
Full Year 2023 Organic Net Sales Change (Unaudited) | |||||||||||
(in millions) | 2022 Net Sales | FX | Acquisition | Organic Net | 2023 Net Sales | Organic Net | |||||
Air Management | $ 7,137 | $ (6) | $ 25 | $ 677 | $ 7,833 | 9.5 % | |||||
Drivetrain & Battery Systems | 3,735 | (17) | — | 630 | 4,348 | 16.9 % | |||||
ePropulsion | 1,906 | (43) | 28 | 275 | 2,166 | 14.4 % | |||||
Inter-segment eliminations | (143) | — | — | (6) | (149) | 4.2 % | |||||
Net sales | $ 12,635 | $ (66) | $ 53 | $ 1,576 | $ 14,198 | 12.5 % | |||||
Adjusted Operating Income and Adjusted Operating Margin Guidance Reconciliation (Unaudited) | |||
Full-Year 2024 Guidance | |||
(in millions) | Low | High | |
Net sales | $ 14,400 | $ 14,900 | |
Operating income | $ 1,225 | $ 1,320 | |
Operating margin | 8.5 % | 8.9 % | |
Non-comparable items: | |||
Restructuring expense | $ 30 | $ 40 | |
Intangible asset amortization | 70 | 70 | |
Adjusted operating income | $ 1,325 | $ 1,430 | |
Adjusted operating margin | 9.2 % | 9.6 % | |
Eldor acquisition impact | $ 60 | $ 45 | |
Adjusted operating income excluding Eldor acquisition impact | $ 1,385 | $ 1,475 | |
Adjusted operating margin excluding Eldor acquisition impact | 9.6 % | 9.9 % | |
Adjusted Earnings Per Diluted Share Guidance Reconciliation (Unaudited) | |||
Full-Year 2024 Guidance | |||
Low | High | ||
Earnings per Diluted Share | $ 3.56 | $ 3.88 | |
Non-comparable items: | |||
Restructuring expense | 0.09 | 0.12 | |
Adjusted Earnings per Diluted Share | $ 3.65 | $ 4.00 | |
Free Cash Flow Guidance Reconciliation From Continuing Operations (Unaudited) | |||
Full-Year 2024 Guidance | |||
(in millions) | Low | High | |
Net cash provided by operating activities | $ 1,325 | $ 1,375 | |
Capital expenditures, including tooling outlays | (850) | (800) | |
Free cash flow | $ 475 | $ 575 | |
Full Year 2024 Organic Net Sales Change Guidance Reconciliation (Unaudited) | |||||||||||
(in millions) | FY 2023 Net | FX | FY 2024 | Organic Net | FY 2024 Net | Organic Net | |||||
Low | $ 14,198 | $ — | $ 44 | $ 158 | $ 14,400 | 1.1 % | |||||
High | $ 14,198 | $ — | $ 44 | $ 658 | $ 14,900 | 4.6 % | |||||
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SOURCE BorgWarner
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