Garrett Motion Inc.

Hello, my name is Andrea, and I will be your operator this morning. I would like to welcome everyone to the Garrett Motion Third Quarter 2024 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 question and answer session. I would now like to hand over the call to Eric Burge, Garrett's Head of Investor Relations. Please go ahead.

Thank you, Andrea. Good day and welcome everyone. Thank you for attending the Garrett Motion third quarter 2024 financial results conference call. Before we begin, I would like to mention that today's presentation and earnings press release are available on the IR section of Garrett Motion's website at investors.garrettmotion.com. There you will also find links to our SEC filings along with other important information about the company. If you look at the second slide in the deck today, We note that this presentation contains forward-looking statements within the meaning of the U.S. Federal Securities Law. These statements, which can be identified by words such as anticipate, intend, plan, believe, estimate, expect, likely, may, should, will, or similar expressions represent management's current expectations and are subject to various risks and uncertainties that could cause our actual results to differ materially from such expectations. These risks and uncertainties include the factors identified in our annual report on Form 10-K and other filings within the Securities and Exchange Commission and includes risks related to the automotive industry and competitive landscapes and macroeconomic and geopolitical conditions, among others. Please review the disclaimers on slide two of our presentation as the content of our call will be governed by this language. Today's presentation also includes certain non-GAAP measures which we use to help describe how we manage and operate our business. We reconcile each of these measures to the most direct comparable gap measure in the appendix of our presentation and related press release. Finally, in today's presentation and comments, we may refer to light vehicle diesel and light vehicle gasoline products by using the terms diesel and gasoline only. With us today are Olivier Rivier, Garrett's President and Chief Executive Officer, and Sean Deason, Garrett's Senior Vice President and Chief Financial Officer. In addition, I would like to introduce Cyril Grandjean, Vice President and Treasurer for Garrett, who will be responsible for investor relations going forward. I will remain with Garrett through November to ensure a smooth transition. I would like to thank everyone for your time and support and wish you and Garrett a very successful future. I will now hand the call over to Olivier.

Thanks, Eric. And thanks, everyone, for joining Garrett's third quarter 2024 earnings conference call. Before we start, I would like to thank Eric for his support and wish him all the best for his next steps. I will now begin today's remarks on slide three. I am pleased to report Garrett's outstanding operational performance in the third quarter. We delivered a strong adjusted EBITDA margin of 17.4%. up 160 basis points over last year despite difficult industry conditions. Indeed, this quarter we have seen the impact of our exposure to softness in the light vehicle industry in Europe and China, some global OEs facing competitive pressure, and some short-term customer vehicle platform mix shifts. At the same time, we continue to enjoy a strong new business win rate in a consolidating industry which helps to ensure that our share of demand will continue to progress. I'd like to take this opportunity to remind you that approximately 30% of our revenue comes from commercial vehicles, aftermarket and industrial. This is a source of resilience for Garrett, as you can see once again this quarter. As our revenue in this category was stable despite further degradation, of the on-highway commercial vehicle industry in Europe and continuing weakness of some verticals like agriculture. We are also encouraged by the early signs of recovery in the China commercial vehicle industry. Let me now again highlight our outstanding operating performance in Q3. During the quarter, we implemented sustainable fixed cost actions and flexed our variable cost structure, giving us significant euro-barrier margin increase and a decremental margin of less than 6% in a soft sales environment. Our strong operational performance also allowed us to generate 71 million of adjusted free cash flow. We continued to buy back stock under our share repurchase program repurchasing $52 million of common stock in the quarter, bringing our total repurchases for the year to $226 million. All of this was while continuing to invest in Turbo and our differentiated technologies for zero-emission solutions. Let me now move to the next slide to share more about the increasing momentum we have with our customers. Turning now to slide four. This quarter, we continue to see Garrett winning across all turbo verticals. Specifically, I'd like to focus on the large-size turbos, where we have been dedicating a significant amount of energy since we first introduced them a year ago. We are building on the strong progress we achieved in Q2 with a number of new wins this quarter. The demand for large turbos is expected to grow quickly, driven in part by the booming demand for data centers, where a significant portion of all backup power generators are fitted with multiple large turbos. And each data center requires dozens of these machines. I am very pleased with the speed at which we have been making this progress in just one year. This quarter, we have also started to see an acceleration of the development activities with our customers relative to the introduction of more plug-in hybrid powertrains, especially in North America. This helps validate the trend that we were anticipating and is a positive development for the turbo industry and for Garrett. Now, let's turn to slide five and talk about the accelerating momentum we see with our zero-emission vehicles technologies. It was indeed a very active quarter for our e-powertrain high speed technology. We are seeing more and more customers not only showing interest, but taking concrete steps towards introducing these technologies in production. The more power our customers need, the higher the benefits associated with our high power density solutions. which we bring with our high-speed electric motors. And this is a trend that many of our customers are considering for the next generation of electric vehicles, whether cars, light commercial vehicles, or heavy-duty trucks. We are therefore quite happy to have signed a letter of intent to jointly develop a leading next-generation electric powertrain with Sinotrack, which contemplates a start of production as early as 2027. This quarter, we were also presented with the 2024 Stellantis Innovation Award, recognizing the advanced capabilities and products that Garrett has developed and that are key for the next generation of electric vehicles. I am quite happy to see this tangible progress and associated recognition validating our strategic focus on bringing differentiated technologies to the electrification transition. I will now turn the call over to Sean to provide more insight into our financial results and for your outlook.