Garrett Motion Inc.

My name is Sarah, and I will be your operator this morning. I would like to welcome everyone to the Garrett Motion Second Quarter Financial Results Conference Call. This call is being recorded, and a replay will be available later today. After the company's presentation, there will be a Q&A session. I would now like to hand the call over to Eric Burge, Garrett's Head of Investor Relations.

Thank you, Sarah. Good morning and welcome, everyone. Thank you for attending Garrett Motions' second quarter financial results conference call. Before we begin, I would like to mention that today's presentation and earnings release are available on the IR section of Garrett Motions' website at investors.garrettmotions.com. You will also find links for the SEC filings along with other important information about our company. Turning to slide two, We note that this presentation contains forward-looking statements within the meetings of the Securities Exchange Act. We encourage you to read the risk factors that are contained within our filings on the Securities Exchange Commission, become aware of the risks and uncertainties in our business, and understand that forward-looking statements are estimates of the future performance and should be taken as such. The forward-looking statements represent management's expectation only as of today, and the company disclaims any obligation to update them. Today's presentation also includes non-GAAP measures to describe how we manage and operate our business. We reconcile each of these measures to the most directly comparable GAAP measure, and you are encouraged to examine these reconciliations in the appendix of the press release and the slide presentation. Also, in today's presentation and comments, we may refer to light vehicle diesel and light vehicle gasoline by using the terms diesel and gasoline only. With us on today's call is Olivier Revier, Garrett's President and Chief Executive Officer, and Sean Deason, Garrett's Senior Vice President and Chief Financial Officer. I will now hand the call over to Olivier.

Thanks, Eric, and thanks, everyone, for joining Garrett's second quarter earnings conference call. I will begin my remarks on slide number three. I first want to thank the entire Garrett team for delivering a very strong quarter through continuous focus on operational excellence and execution that allowed us to outperform across all key financial metrics. In Q2 2023, we delivered net sales of a little more than $1 billion, up 18% on the reported basis and up 19% on the constant currency basis. This revenue growth was driven by the ramp-up of new products, restocking by many OEMs in both Europe and North America, and the end of COVID restrictions in China when compared to last year. Adjusted EBITDA this quarter was 170 million versus 138 million in the same period last year. Our significantly higher volumes coupled with continued operational performance gave a boost to our adjusted EBITDA margin of 16.8% up from 16.1% in Q2 of last year. All these factors enabled us to finish the quarter with an adjusted free cash flow of $140 million, up from $23 million in the same quarter the year prior, and extremely strong performance driven by favorable working capital as we successfully converted Q2 revenue growth into cash. This, once again, highlights the benefits of our unique low working capital needs that enable Garrett to conserve quickly in cash and increase in revenue. During the quarter, we also successfully executed our capital structure transformation, which resulted in one class of common shares. As you may recall, we began that journey last year when we redeemed all Series B shares in full and then began settling the dividend on the Series A in cash. The final step in this transformation was completed in Q2 when we converted all Series A shares in common shares. As part of this, we also agreed to repurchase 570 million of Series A shares before the conversion, funded by a new $700 million term loan B. All of this has brought our market cap to about $2 billion and has increased the market liquidity of our common share by about five times. At the same time, the company also increased its existing share repurchase authorization to $250 million, as an additional lever to support the stock after the conversion took place. And as of July the 25th, we have already repurchased a total of $80 million of common shares. The second quarter was not only marked by our very strong financial performance and the simplification of our capital structure, as we also secured our second pre-development contract for high-speed e-traction system and the first pre-development contract for our innovative e-cooling compressor. We will get into more details regarding this on the next slide. Now, based on the performance of the business in the first half, we are again raising our outlook for the full year, which Sean will take you through in more detail later in the presentation. Considering the strong cash generation we achieve in Q2, we have also made the decision to repay $200 million of debt in Q3, a strong first step in delivering toward our target net leverage ratio of two times. Turning now to slide four. During the quarter, we were awarded two new programs for our e-compressor, a technology that combines our expertise in air compression and high-speed electric motors. Both will be fitted on hybrid powertrains for major European OEMs. For our on-highway business, we want two new programs establishing a new position with a major trackmaker in China. This is supporting our growth in commercial vehicles, which is a very important part of our business. And we also remain on track to launch our first off-highway hydrogen ice application that we previously announced. Moving to our zero-emission offering, And as mentioned earlier, we continue to build momentum and add another successful quarter with the award of our second pre-development contract for our high-speed, high-power density e-powertrain. This, again, demonstrates the accelerating interest of our customers in our differentiated electric technology solution. In addition, during the second quarter, our investment in zero-emission technologies continued to show success. I'm very pleased to announce that we won our first redevelopment for our high-performance e-cooling compressor, which provides a differentiated solution for electric vehicle thermal management. This product leverages our expertise in high-speed electric motors and controls, combined with our industry-leading air compression capabilities to deliver smaller packaging, lighter weight, and the higher cooling power needed by electric vehicles. This unique technology brings a step change in the cooling capacity of electric vehicles and provides a game-changing opportunity for OEs in the way they can cool electric powertrain, a key enabler for fast charging and high continuous power use. These pre-development wins are proof points that the technologies we develop for EVs are differentiated and needed by our customers in order to meet the challenges of the next generation of zero-emission vehicles. With these awards and our planned launch of five applications of our Gen 2 and Gen 3 hydrogen fuel cell compressors, we remain committed to our target of $1 billion of annual sales of zero-emission vehicle products by 2030 at or above the margin profile of our existing business. I will note turn things over to Sean that will provide more insight into our financial results.