博格華納 (BWA) 2025 Q1 法說會逐字稿

Good morning. My name is Wyatt, and I will be your conference specialist. At this time, I would like to welcome everyone to the BorgWarner 2025 first quarter results conference call. (Operator Instructions)

早安.我叫懷亞特，我將擔任您的會議專家。現在，我歡迎大家參加博格華納2025第一季業績電話會議。（操作員指示）

I would now like to turn the call over to Patrick Nolan, Vice President of Investor Relations. Mr. Nolan, you may begin your conference.

現在我想將電話轉給投資者關係副總裁 Patrick Nolan。諾蘭先生，您可以開始您的會議了。

Thank you, Wyatt. Good morning, everyone. Thank you for joining us today. We issued our earnings release earlier this morning. It's posted on our website borgwarner.com, both on the homepage on our Investor Relations homepage.

謝謝你，懷亞特。大家早安。感謝您今天加入我們。我們今天早上發布了收益報告。它發佈在我們的網站 borgwarner.com 上，既在我們的主頁上，也在我們的投資者關係主頁上。

With regard to our Investor Relations calendar, we will be attending multiple conferences between now and our next earnings release. Please see the events section of our IR page for a full list. Before we begin, I need to inform you that during this call, we may make forward-looking statements, which involve risks and uncertainties as detailed in our 10-K.

關於我們的投資者關係日程，從現在到下次發布收益報告期間，我們將參加多場會議。請參閱我們的 IR 頁面的活動部分以取得完整清單。在我們開始之前，我需要通知您，在本次電話會議中，我們可能會做出前瞻性陳述，其中涉及我們的 10-K 中詳述的風險和不確定性。

Our actual results may differ significantly from the matters discussed today. During today's presentation, we'll highlight certain non-GAAP measures in order to provide a clearer picture of the core business was formed and for comparison purposes with prior year periods.

我們的實際結果可能與今天討論的問題有很大不同。在今天的演示中，我們將重點介紹某些非公認會計準則指標，以便更清楚地了解核心業務的形成情況，並與去年同期進行比較。

When you hear it say on a comparable basis, that means excluding the impact of FX, net M&A, and other non-comparable items. When you hear us say adjusted, that means excluding non-comparable items. When you hear her say organic, that means excluding the impact of FX and net M&A. We will also refer to our incremental margin performance. Our incremental margin performance is defined as the organic change in our adjusted operating income divided by the organic change in sales.

當你聽到「以可比較基礎」時，這意味著排除外匯、淨併購和其他不可比較項目的影響。當您聽到我們說調整時，這意味著排除不可比的項目。當你聽到她提到有機成長時，這意味著排除外匯和淨併購的影響。我們也將參考我們的增量利潤表現。我們的增量利潤率表現定義為調整後營業收入的有機變化除以銷售額的有機變化。

Lastly, we refer to our growth compared to our market. When you hear us say market, that means the change in light and commercial vehicle production waited for our geographic exposure. Please note that we posted today's earnings call presentation to the IR page of our website. We encourage you to follow along with these slides during our discussion.

最後，我們來談談我們相對於市場的成長。當您聽到我們說市場時，這意味著輕型和商用車生產的變化等待著我們的地理曝光。請注意，我們已將今天的收益電話會議報告發佈到我們網站的 IR 頁面上。我們鼓勵您在討論過程中關注這些投影片。

With that, I'm happy to turn the call over to Joe.

說完這些，我很高興將電話轉給喬。

Thank you, Pat, and good morning everyone. I'm pleased to share our results for the first quarter of 2025 and provide an overall company update starting on slide 5. I wish to begin by thanking our employees, our customers, and suppliers for all of their trust and efforts. With just over $3.5 billion our organic sales were relatively flat, despite a decline in market production.

謝謝你，帕特，大家早安。我很高興分享我們 2025 年第一季的業績，並從第 5 張投影片開始提供公司的整體更新。首先，我要感謝我們的員工、客戶和供應商的所有信任和努力。儘管市場產量下降，但我們的有機銷售額略高於 35 億美元，相對持平。

Our sales outgrowth in the quarter was strong at 3.7%, which was primarily driven by a 47% increase in light vehicle e-product sales. This growth was well ahead of the 25% increase in global hybrid and BEV production in the quarter. Which we believe further validates our product leadership position and leading edge technology that our customers demand to solve the world's mobility needs.

本季我們的銷售額成長強勁，達到 3.7%，主要得益於輕型汽車電子產品銷售額成長 47%。這一增長遠高於本季全球混合動力汽車和純電動車產量 25% 的增幅。我們相信這進一步驗證了我們的產品領先地位和客戶解決世界移動需求所需的領先技術。

We continue to secure multiple new product awards for both foundational and e-products across our portfolio. I'm pleased to announce a wide array of new business awards that I expect will support our focus on long-term profitable growth.

我們繼續在我們的產品組合中贏得基礎產品和電子產品的多個新產品獎項。我很高興地宣布一系列新的商業獎項，我希望這些獎項將支持我們對長期獲利成長的關注。

Our adjusted operating margin performance was strong in the first quarter, coming in at 10%. This strong underlying operational performance was once again driven by e-products growth and our focus on cost controls across our business.

我們第一季的調整後營業利潤率表現強勁，達到 10%。這一強勁的基本營運業績再次受到電子產品成長和我們對整個業務成本控制的關注的推動。

Next, we make two important portfolio decisions in the quarter that will drive focus and competitiveness of our product portfolio. It's important that we continuously review our portfolio to ensure we stay focused on products that we can scale and achieve BorgWarner's 15% ROIC threshold. With that in mind, we made the difficult decision to exit our charging business.

接下來，我們將在本季做出兩項重要的產品組合決策，這將推動我們產品組合的重點和競爭力。重要的是，我們要不斷審查我們的產品組合，以確保我們專注於可擴展的產品並達到博格華納 15% 的 ROIC 門檻。考慮到這一點，我們做出了退出充電業務的艱難決定。

Ultimately, we did not see this business creating shareholder value within our planning horizon. Additionally, we began capacity consolidation actions within our North American battery systems business during the quarter. This was done to adjust our cost structure to current market dynamics and create a more competitive business.

最終，我們認為這項業務不會在我們的規劃期間創造股東價值。此外，我們本季開始在北美電池系統業務內進行產能整合行動。這樣做是為了根據當前的市場動態調整我們的成本結構並創造更具競爭力的業務。

As I reflect back on my first 90 days as CEO, I couldn't be more excited about the future of BorgWarner. I continue to believe that we have the right product portfolio, leadership, and focus on operational performance to drive profitable growth and significant shareholder value for years to come. I'm very pleased with our first quarter results, the momentum behind our continued product awards, and the strength of our portfolio that we can continue to build upon.

回顧擔任執行長的頭 90 天，我對博格華納的未來感到無比興奮。我始終相信，我們擁有正確的產品組合、領導力和對營運績效的關注，能夠在未來幾年推動獲利成長和顯著的股東價值。我對我們的第一季業績、我們持續獲得產品獎項的勢頭以及我們可以繼續鞏固的產品組合實力感到非常滿意。

Now let's look at some new product awards on slide 6, which I continue to believe are a strong indicator of our future profitable growth. First, BorgWarner has secured a hybrid eMotor award with a major North American OEM. Our 400-volt S-Wind eMotor will be used on a series of hybrid, full-size trucks and SUVs as well as a performance vehicle application. This business is expected to launch in 2028. We are so excited and looking forward to deepening our relationship with this OEM.

現在讓我們來看看投影片 6 上的一些新產品獎項，我仍然相信這些獎項是我們未來獲利成長的有力指標。首先，博格華納已獲得北美一家大型 OEM 廠商的混合動力 eMotor 合約。我們的 400 伏特 S-Wind 電動馬達將用於一系列混合動力、全尺寸卡車和 SUV 以及高性能車輛應用。該業務預計將於 2028 年啟動。我們非常興奮並期待加深與這家 OEM 的關係。

Second, BorgWarner has secured a high-voltage coolant heater award in North America with a global OEM for their plug-in hybrid electric vehicle platforms. The award includes PHEV applications, spanning midsize pickup trucks, SUVs and minivans. This business is expected to launch in 2027.

其次，博格華納已與一家全球 OEM 廠商在北美贏得了為其插電式混合動力電動車平台提供高壓冷卻液加熱器的合約。該獎項涵蓋 PHEV 應用，涵蓋中型皮卡、SUV 和小型貨車。該業務預計將於 2027 年啟動。

Next, BorgWarner is extending four programs for exhaust gas recirculation components, including valves, coolers and complete modules with a major North American OEM. BorgWarner's EGR systems are used on several of the automakers passenger and light commercial vehicle platforms. Production of these components is expected to continue through the end of 2029.

接下來，博格華納將與北美一家大型汽車製造商合作，擴展四個廢氣再循環組件項目，包括閥門、冷卻器和完整模組。博格華納的 EGR 系統應用於多家汽車製造商的乘用車和輕型商用車平台。這些零件的生產預計將持續到 2029 年底。

And finally, BorgWarner has secured two dual clutch transmission awards in China including a seven year extension with a German OEM in China and a new award with a prominent transmission manufacturer with production expected to start at the end of 2025. We believe these awards further validate the strength of our product portfolio and the need for our technology across combustion, hybrid and BEV platform.

最後，博格華納在中國獲得了兩項雙離合器變速箱合同，包括與中國一家德國汽車製造商的七年續約合同，以及與一家知名變速器製造商的新合同，預計將於 2025 年底開始生產。我們相信這些獎項進一步證明了我們產品組合的實力以及我們在內燃機、混合動力和純電動車平台上的技術的需求。

Now let's turn to slide 7 and review our decision to exit our charging business. We actively assess our portfolio to position it to grow above industry production. As part of our ongoing assessment, we reached the difficult decision to exit our charging business based on our analysis of the current market and midterm financial outlook for this business.

現在讓我們翻到第 7 張投影片，回顧我們退出充電業務的決定。我們積極評估我們的投資組合，以使其成長速度高於行業產量。作為我們正在進行的評估的一部分，根據對當前市場和該業務的中期財務前景的分析，我們做出了退出充電業務的艱難決定。

Unfortunately, the charging market is not growing as anticipated in both North America and Europe. The market also remains highly competitive and disaggregated. This backdrop is causing challenges in achieving scale and our ROIC thresholds. As a result, we believe our charging business is unlikely to create shareholder value in the near to midterm. Therefore, we have made the difficult decision to cease global charging operations.

不幸的是，北美和歐洲的充電市場並沒有像預期的那樣成長。市場競爭依然激烈且分散。這種背景為我們實現規模和 ROIC 門檻帶來了挑戰。因此，我們認為我們的充電業務不太可能在近期至中期創造股東價值。因此，我們做出了艱難的決定，停止全球充電業務。

To achieve this, we will shut down or sell five locations across three regions. These actions are expected to be completed during the second quarter of the year. We expect this will create a more focused portfolio and eliminate approximately $30 million of annualized operating losses. Compared to our previous 2025 guidance, the exit of our charging business is approximately a $30 million headwind to sales, but a $15 million increase to operating income. While the decision to exit charging was not easy, we believe that it will further strengthen our product portfolio and position BorgWarner to continue to grow profitably.

為了實現這一目標，我們將關閉或出售三個地區的五個門市。預計這些行動將在今年第二季完成。我們預計這將創建一個更集中的投資組合併消除約 3000 萬美元的年度營運損失。與我們先前 2025 年的指引相比，退出充電業務將為銷售額帶來約 3,000 萬美元的阻力，但會使營業收入增加 1,500 萬美元。雖然退出充電領域的決定並不容易，但我們相信這將進一步加強我們的產品組合，並使博格華納能夠繼續實現盈利成長。

Now let's turn to slide 8 and discuss capacity consolidation actions that we are undertaking within our Battery Systems business. While we remain pleased with the technological and competitive positioning of our battery systems business, we do see lower demand in North America than we had expected at the beginning of the year.

現在讓我們翻到第 8 張投影片，討論一下我們在電池系統業務中正在採取的產能整合行動。雖然我們對電池系統業務的技術和競爭定位感到滿意，但我們確實看到北美的需求低於年初的預期。

Therefore, it was critical for us to right size our North American battery system capacity to current market dynamics with consolidation actions that started late in the first quarter. These actions include shifting all battery production from our Hazel Park and Warren, Michigan locations to our Seneca, South Carolina plant. We estimate cumulative cash cost of these actions to be approximately $10 million that will extend through 2026.

因此，對我們來說，從第一季末開始的整合行動必須根據當前市場動態調整北美電池系統容量的規模，這一點至關重要。這些措施包括將所有電池生產從密西根州 Hazel Park 和 Warren 工廠轉移到南卡羅來納州 Seneca 工廠。我們估計這些行動的累積現金成本約為 1000 萬美元，並將持續到 2026 年。

These actions are expected to result in annual cost savings of approximately $20 million by 2026. After these actions, all our North American battery capacity will be consolidated into our Seneca plant, which is one of our largest facilities in North America. The intention of this restructuring is to improve the near-term earnings of this business but also position the business for long-term success.

預計到 2026 年，這些措施每年將節省約 2,000 萬美元的成本。經過這些行動，我們所有的北美電池產能將整合到我們的塞內卡工廠，這是我們在北美最大的工廠之一。此次重組的目的是提高該業務的短期收益，同時也為業務的長期成功做好準備。

To summarize, the key takeaways from today are the following. First, BorgWarner's first quarter results were strong. Sales performance once again outperformed industry production supported by a 47% increase in our light vehicle eProducts business across the world. Our adjusted operating margin expanded 60 basis points despite a 20 basis point headwind from tariffs, reflecting our continued focus on cost controls and turning sales growth into income.

總而言之，今天的要點如下。首先，博格華納第一季業績強勁。得益於全球輕型汽車電子產品業務成長 47%，銷售業績再次超越產業產量。儘管關稅帶來 20 個基點的不利影響，但我們的調整後營業利潤率仍擴大了 60 個基點，這反映出我們繼續專注於成本控制並將銷售成長轉化為收入。

Second, we secured multiple new business awards in the quarter across our entire portfolio, which we believe further demonstrates our focus on product leadership across combustion, hybrid and BEV architectures.

其次，我們在本季度獲得了整個產品組合中的多個新業務獎項，我們相信這進一步證明了我們對內燃機、混合動力和純電動車架構產品領導力的關注。

And finally, we took meaningful steps to manage our cost structure and create a more focused portfolio in response to changing market dynamics. While we acknowledge that we are operating in a challenging and uncertain environment, I'm confident in our team and their ability to effectively manage through another uncertain production environment. We have the right portfolio, a decentralized operating model and the financial strength to deliver our revised guidance and drive long-term profitable growth.

最後，我們採取了有意義的措施來管理我們的成本結構，並創建更有針對性的投資組合以應對不斷變化的市場動態。雖然我們承認我們正處於一個充滿挑戰和不確定性的環境中，但我對我們的團隊及其有效管理另一個不確定的生產環境的能力充滿信心。我們擁有正確的產品組合、分散的營運模式和財務實力，可以提供修訂後的指導並推動長期獲利成長。

With that, I'll turn the call over to Craig.

說完這些，我會把電話轉給克雷格。

Thank you, Joe, and good morning, everyone. Before I dive into the financials, I'd like to provide a quick overview of our first quarter results. First, we reported just over $3.5 billion in sales, which was relatively flat versus prior year, excluding FX and M&A. Market production in the quarter was down approximately 3.6%. So we saw sales outgrowth in the quarter of approximately 3.7%. This was driven by strong light vehicle eProduct growth across all major regions of the world and foundational growth outside of China.

謝謝你，喬，大家早安。在深入研究財務狀況之前，我想先簡單概述一下我們第一季的業績。首先，我們報告的銷售額略高於 35 億美元，與前一年相比基本持平（不包括外匯和併購）。本季市場產量下降約 3.6%。因此，我們看到本季銷售額成長了約 3.7%。這是由全球各主要地區輕型汽車電子產品的強勁增長以及中國以外地區的基礎增長所推動的。

Second, we had strong adjusted operating margin performance in the quarter at 10.0%. This performance was achieved despite $6 million or a 20 basis tariff headwind in the quarter. This also represents the fourth quarter in a row with a margin at or above 10%, which I believe demonstrates the consistency of our operating performance. Third, we had strong free cash flow in the quarter, with our results improving by over $270 million or 89% year-over-year.

其次，本季我們的調整後營業利益率表現強勁，達到 10.0%。儘管本季面臨 600 萬美元或 20 個基點的關稅逆風，但仍取得了這一業績。這也是我們連續第四個季度的利潤率達到或超過 10%，我認為這證明了我們經營業績的一致性。第三，本季我們的自由現金流強勁，業績年增超過 2.7 億美元，增幅達 89%。

Now let's turn to slide 9 for a look at our year-over-year sales walk for the first quarter. Last year's Q1 sales were just under $3.6 billion. You can see that the weakening US dollar drove a year-over-year decrease in sales of $85 million. Then you can see a slight increase in organic sales, which was 3.7% above market production. This outgrowth was due to a 47% increase in light vehicle eProduct growth across all major regions as well as foundational growth in Europe, North America and the rest of the world. The sum of all this was just over $3.5 billion of sales in Q1.

現在讓我們翻到第 9 張投影片，看看我們第一季的年比銷售情況。去年第一季的銷售額略低於 36 億美元。您可以看到，美元疲軟導致銷售額年減 8,500 萬美元。然後你會看到有機銷售額略有增加，比市場產量高出 3.7%。這一增長是由於所有主要地區輕型車輛電動車產品增長了 47%，以及歐洲、北美和世界其他地區的基礎性增長。所有這些加起來，第一季的銷售額剛剛超過 35 億美元。

Turning to Slide 10. You can see our earnings and cash flow performance for the quarter. Our first quarter adjusted operating income was $352 million, equating to a strong 10.0% adjusted operating margin, which includes a 20 basis point headwind from tariff costs. That compares to adjusted operating income from continuing operations of $339 million or a 9.4% adjusted operating margin from a year ago.

翻到幻燈片 10。您可以看到我們本季的收益和現金流表現。我們第一季的調整後營業收入為 3.52 億美元，相當於 10.0% 的強勁調整後營業利潤率，其中包括關稅成本帶來的 20 個基點的阻力。相較之下，去年同期持續經營業務的調整後營業收入為 3.39 億美元，調整後營業利益率為 9.4%。

On a comparable basis, adjusted operating income increased $23 million on $5 million of higher sales. This is a great result and reflects our ability to deliver profitability despite a declining production environment. This performance was driven by the benefit of our restructuring efforts as well as our continued focus on cost controls across our business. Our adjusted EPS from continuing operations was up $0.08 compared to a year ago as a result of strong adjusted operating income and the impact of our share repurchases during 2024.

在可比較基礎上，銷售額增加 500 萬美元，調整後營業收入增加 2,300 萬美元。這是一個很好的結果，反映了我們在生產環境下滑的情況下仍然能夠實現盈利的能力。這項績效得益於我們重組努力的成果以及我們對整個業務成本控制的持續關注。由於強勁的調整後營業收入以及 2024 年股票回購的影響，我們持續經營業務的調整後每股收益較去年同期上漲 0.08 美元。

And finally, free cash flow from continuing operations was a usage of $35 million during the first quarter, which was a significantly lower usage than a year ago, driven by higher operating income better working capital efficiency and lower capital spending.

最後，第一季持續經營產生的自由現金流為 3,500 萬美元，較去年同期大幅下降，這得益於更高的營業收入、更好的營運資本效率和更低的資本支出。

Now let's take a look at our full year outlook on slide 11. First, it's important to note that our guidance includes estimated net tariff costs related to all previously announced US and retaliatory tariffs. We are now projecting total 2025 sales in the range of $13.6 billion to $14.2 billion, which is an increase from our prior guidance of $13.4 billion to $14 billion. This increase is due to stronger foreign currencies and the impact of anticipated tariff cost recoveries, partially offset by a lower market production outlook and the exit of our charging business.

現在讓我們來看看幻燈片 11 上的全年展望。首先，值得注意的是，我們的指導包括與所有先前宣布的美國和報復性關稅相關的估計淨關稅成本。我們現在預測 2025 年的總銷售額將在 136 億美元至 142 億美元之間，高於我們先前預測的 134 億美元至 140 億美元。這一增長是由於外幣走強以及預期關稅成本回收的影響，但被市場產量前景下降和我們退出充電業務所部分抵消。

Now let's review our year-over-year sales walk. Starting with foreign currencies. Our guidance now assumes an expected full year sales headwind from weaker foreign currencies of $160 million compared to 2024. However, this is a sales tailwind of $250 million versus our prior guidance, primarily due to the strengthening of the euro and the Chinese renminbi versus the US dollar.

現在讓我們回顧一下我們去年同期的銷售情況。從外幣開始。我們現在的預測是，預計受外幣走弱影響，全年銷售額將比 2024 年減少 1.6 億美元。然而，與我們先前的預期相比，這一銷售額增長了 2.5 億美元，這主要是由於歐元和人民幣兌美元走強。

Within our guidance, our full year end market assumption has been reduced to down 2% to 4% versus down 1% to 3% previously. This reduction reflects our estimated impact of tariffs on customer demand, primarily in North America. We also incorporated a $30 million sales headwind related to the exit of our charging business during the first quarter. Within this guidance, we expect a tailwind from tariff-related recoveries of up to 1.6% of sales as this is a pass-through recovery of our costs from our customers.

在我們的指導範圍內，我們對全年市場預期已從先前下降的 1% 至 3% 下調至下降 2% 至 4%。這項削減反映了我們對關稅對客戶需求（主要是北美）影響的估計。我們還在第一季承受了與退出充電業務相關的 3000 萬美元的銷售逆風。在這一指導範圍內，我們預計與關稅相關的回收將帶來高達 1.6% 的銷售額成長，因為這是我們從客戶那裡收回成本的轉嫁方式。

Additionally, we expect the company's full year sales outgrowth to be approximately 200 basis points to 400 basis points. Based on these assumptions, we expect our 2025 organic sales change to be down 2% to up 2% year-over-year, in line with our previous guidance.

此外，我們預計該公司全年銷售額成長率將達到約 200 個基點至 400 個基點。基於這些假設，我們預計 2025 年有機銷售變化將年減 2% 至上升 2%，與我們先前的預期一致。

Now let's switch to margin. We expect our full year adjusted operating margin to be in the range of 9.6% to 10.2% compared to our previous guidance of 10.0% to 10.2%. This revised guidance now assumes 20 basis points of dilution from tariffs as estimated tariff recoveries will flow through sales with no benefit to margin.

現在讓我們切換到保證金。我們預計全年調整後的營業利潤率將在 9.6% 至 10.2% 之間，而先前的預期為 10.0% 至 10.2%。修訂後的指南現在假設關稅稀釋 20 個基點，因為估計的關稅回收將透過銷售流入，而不會對利潤率產生任何好處。

Our wider margin range incorporates various industry volume outcomes and a range of results related to tariff cost recoveries. Overall, we view this as a strong underlying performance supported by our solid first quarter operational execution, which we expect to continue for the remainder of 2025.

我們的利潤範圍更廣，涵蓋了各種行業產量結果以及與關稅成本回收相關的一系列結果。總體而言，我們認為這是強勁的基礎表現，由於我們第一季穩健的營運執行，我們預計這種表現將持續到 2025 年剩餘時間。

Based on this sales and margin outlook, we're expecting full year adjusted EPS in the range of $4 to $4.45 per diluted share with the midpoint unchanged from our previous guidance. And we continue to expect full year free cash flow to be in the range of $650 million to $750 million. With that, that's our 2025 outlook.

根據這一銷售和利潤前景，我們預計全年調整後每股收益將在 4 美元至 4.45 美元之間，中間值與我們之前的預期相同。我們繼續預計全年自由現金流將在 6.5 億美元至 7.5 億美元之間。這就是我們對 2025 年的展望。

So let me summarize my financial remarks. Overall, we were very pleased with our first quarter results. Our sales outgrowth, margin and free cash flow performance represents a strong start to the year, and we believe positions us well to meet or exceed our revised guidance. I'm confident in our global teams and their ability to effectively manage through any near-term uncertainty from tariffs or other events.

因此，讓我總結一下我的財務評論。整體而言，我們對第一季的業績非常滿意。我們的銷售成長、利潤率和自由現金流表現代表著今年的強勁開局，我們相信我們有能力達到或超過我們修訂後的預期。我對我們的全球團隊及其有效應對關稅或其他事件帶來的任何短期不確定性的能力充滿信心。

As we look ahead to the balance of 2025, our outlook aligns with our best assessment of market dynamics and the financial impacts of currently announced tariffs. As we continue to focus on what we can control, we are still expecting to deliver on our financial priorities.

展望 2025 年，我們的展望與對市場動態和當前宣布的關稅的財務影響的最佳評估一致。當我們繼續關注我們能夠控制的事情時，我們仍然期望實現我們的財務優先事項。

First, we still expect to continue to outperform market production with an expected full year sales outgrowth of 200 basis points to 400 basis points. Second, the midpoint of our EPS guidance is unchanged despite the headwinds of tariff-related costs and a lower market production outlook. And finally, we expect to have another year of strong free cash flow of $700 million at the midpoint of our guidance which is consistent with our prior guidance.

首先，我們仍預期全年銷售額將持續超過市場產量，預計成長率為 200 個基點至 400 個基點。其次，儘管面臨關稅相關成本和市場生產前景下行的阻力，但我們的每股盈餘指引中點保持不變。最後，我們預計今年的自由現金流將達到強勁的 7 億美元，與我們先前的預期一致。

We believe our ability to drive strong free cash flow in combination with our investment-grade balance sheet allows us to continue to create shareholder value through a balanced capital allocation approach.

我們相信，我們推動強勁自​​由現金流的能力，加上我們的投資等級資產負債表，使我們能夠透過平衡的資本配置方式繼續創造股東價值。

With that, I'd like to turn the call back over to Pat.

說完這些，我想把電話轉回帕特。

Thank you, Craig. Wyatt we're ready to open up for questions.

謝謝你，克雷格。懷亞特，我們準備好回答問題了。

(Operator Instructions)

（操作員指示）

John Murphy, Bank of America.

美國銀行的約翰‧墨菲。

Good morning, guys. I'm going to try to steer clear of tariffs and get to the core business. If we think about slide 6, Joe, I mean, you have some great extensions here and some great wins. I'm just curious, as you look at those business extensions on foundational product, what that ultimately means for the need to maybe reinvest a bit as those programs get extended in tooling and other PP&E and what that could mean for returns and margins.

大家早安。我將嘗試避開關稅並專注於核心業務。喬，如果我們考慮幻燈片 6，我的意思是，你在這裡有一些很棒的擴展和一些很棒的勝利。我只是很好奇，當你看到基礎產品上的那些業務擴展時，這最終意味著什麼，因為隨著這些項目在工具和其他 PP&E 上的擴展，可能需要再投資一點，以及這對回報和利潤意味著什麼。

But then also, as we think about these eProduct awards, which sound like they're pretty good wins here, some pretty big products. What are kind of the return characteristics you're expecting there? And one of the big things that's happening right now is there's concern around rare earths. So as we think about eMotors and other eProducts, is there any kind of risk that we should think about there or solutions that you have?

但是，當我們考慮這些電子產品獎項時，聽起來它們都是相當不錯的獎項，都是一些相當重要的產品。您期望的回報特徵是什麼樣的？目前發生的一件大事就是人們對稀土的擔憂。那麼，當我們考慮電動馬達和其他電子產品時，是否存在我們應該考慮的風險，或者您有什麼解決方案？

Sure, so good morning, John. I'll speak to the extensions first. I think this highlights really the strength and the stickiness of our portfolio. We're excited when we get an extension. So you can expect continued strong margins and similar profiles of what we have today.

當然，早上好，約翰。我首先要談擴展。我認為這確實凸顯了我們投資組合的實力和黏性。當我們獲得延期時我們很興奮。因此，您可以期待我們繼續保持強勁的利潤率和與今天類似的業績。

With regard to some of the newer wins I mentioned, this is fantastic, especially because they're related to hybrids. We're starting to get more clarity from the OEMs as they finalize some of their cycle plan changes. And I think the first quarter wins really gives me confidence that we've got great products and our customers are demanding them and they're fitting into this hybrid space, which we've all been waiting to see some of the growth there.

就我提到的一些較新的勝利而言，這非常棒，特別是因為它們與混合動力有關。隨著原始設備製造商 (OEM) 最終確定部分週期計劃變更，我們開始從他們那裡獲得更清晰的資訊。我認為第一季的成功確實給了我信心，我們擁有優秀的產品，我們的客戶對這些產品有需求，而且它們適合這個混合領域，我們一直在等待看到那裡的一些成長。

And then finally, with regard to rare earth. So we do have products that consume rare earth elements and specifically magnets. So as with any constrained component area. We have teams in place to manage through that. There is a license you can submit with a 45-day lead time to the China government on that. And we're hopeful to get approval on those. And in the meantime, we continue to look for other options to make sure we can continue with supply.

最後，關於稀土。因此，我們的產品確實消耗稀土元素，特別是磁鐵。與任何受約束的組件區域一樣。我們已經設立了一個團隊來處理這個問題。您可以提前 45 天向中國政府提交許可證。我們希望獲得批准。同時，我們將繼續尋找其他選擇，以確保能夠繼續供應。

Okay. And if I could just sneak in one follow-up on the portfolio actions. It seems like these are really great returns. I mean, is there anything else that is in the portfolio? Or are you just constantly reviewing this Joe, as you kind of stepped into this new role in leading the company and making some tough decisions that maybe weren't made in the past where the market is shifting? Is that battery exit of $10 million cash cost and then $20 million benefit to operating income next year is quite phenomenal, right, I'm just curious if there's anything else like that out there.

好的。如果我可以偷偷跟進一下投資組合的行動就好了。看起來這確實是豐厚的回報。我的意思是，投資組合中還有其他東西嗎？或者你只是不斷地回顧這一點，喬，當你擔任領導公司的新角色並做出一些艱難的決定時，這些決定在過去可能沒有做過，因為市場正在改變？電池出口的 1000 萬美元現金成本，以及明年 2000 萬美元的營業收入收益，是否相當驚人，對吧，我只是好奇是否還有其他類似的東西。

Yeah. So you're right. I mean we have taken a critical eye to the portfolio. And I think that's important for us to do to be decisive around areas of the portfolio that we don't see us building the scale we expect or reaching our 15% ROIC target. So that's exactly what happened with regard to charging and also the battery consolidation.

是的。所以你是對的。我的意思是我們對投資組合採取了批判的眼光。我認為，對於投資組合中那些我們認為無法達到預期規模或無法達到 15% ROIC 目標的領域，我們必須果斷行事。這就是充電和電池整合方面發生的事情。

The battery consolidation of capacity in North America, we really got there due to this lower volume we expect in North America than when we started the year. So we think it's going to position us well for the long term, improve our competitiveness as well as bring some short-term returns due to the cost reduction. So we still feel technologically and from a competitive standpoint really good about that business. But as usual, we want to take the size of actions when we see some of the market dynamics that we see today.

北美的電池產能整合確實實現了，因為我們預計北美的電池產量將低於年初的水平。因此我們認為這將使我們在長期內處於有利地位，提高我們的競爭力，並透過降低成本帶來一些短期回報。因此，從技術和競爭角度來看，我們仍然對該業務感到非常滿意。但像往常一樣，當我們看到今天看到的一些市場動態時，我們希望採取一定規模的行動。

Very helpful. Thank you guys.

非常有幫助。謝謝你們。

Colin Langan, Wells Fargo.

富國銀行的科林·蘭根。

Great, thanks for taking my questions. On the slide, you indicate China growth over market was a modest positive which is a pretty good start because that's been a point of investor concern. I thought the comps actually start to get better next quarter. So how should we think about this trending through the rest of the year? Is this sort of the start of things turning in that market?

太好了，謝謝你回答我的問題。在投影片上，您指出中國市場的成長是溫和的正成長，這是一個相當好的開始，因為這是投資人關注的問題。我認為下個季度業績實際上會開始好轉。那我們該如何看待今年剩餘時間的趨勢呢？這是否標誌著該市場開始出現轉變？

Yeah, Colin, I'm not going to comment on the rest of the year. Obviously, a lot of moving pieces right now. But as we look at Q1, we feel really good about our growth in general or outgrowth in general and especially our China business. Again, just a couple of numbers for you.

是的，科林，我不會對今年剩餘的時間發表評論。顯然，現在有很多事情正在改變。但當我們回顧第一季時，我們對我們的整體成長或整體成長，特別是我們的中國業務感到非常滿意。再次強調，我只想告訴大家幾個數字。

We outgrew the industry by about 3.7% overall. And where did that come from? A lot of it was on the light vehicle side of our portfolio, light vehicle eProduct growth of 47%. We've been talking about for some time, really watch PDS. PDS grew quite significantly in the quarter about 30% year-over-year.

我們的整體成長速度比行業平均高出約 3.7%。那它從何而來？其中很大一部分來自我們產品組合中的輕型車輛方面，輕型車輛電子產品增加了 47%。我們已經討論了一段時間，真正關注 PDS。本季 PDS 成長顯著，年增約 30%。

But when you look at the light vehicle eProduct portion of the portfolio, they grew by over 60% year-over-year. And the good news is we saw that across all regions of the world, North America, Europe, China, so we're really seeing a nice pull from that business. So that's the comments I would have on your question.

但當你查看產品組合中的輕型車輛電子產品部分時，你會發現它們的同比增長率超過 60%。好消息是，我們在世界各地，包括北美、歐洲、中國，都看到了這一現象，因此我們確實看到了該業務的良好成長。這就是我對你的問題的評論。

And maybe to add a little bit of color to that. I just returned from China at the Shanghai Auto Show. And it just confirms to me in that market, there's still a lot of demand for our competitive technology. Our speed that we're operating in that market really sets us apart from our competition. Just one example, we launched with a leading Chinese customer, a dual inverter second half of last year, and we launched that in 10 months.

或許還能為其增添一點色彩。我剛從中國上海車展回來。這向我證實了，在那個市場上，對我們的競爭技術仍然有很大的需求。我們在該市場的營運速度確實使我們在競爭中脫穎而出。舉個例子，去年下半年我們與一家中國領先客戶合作推出了一款雙逆變器，我們在 10 個月內就推出了該產品。

Now they're asking for us a capacity uplift. In fact, they want to double the capacity, and they're asking for it to be installed in June. So the speed of that market, combined with the success we're having, we're really optimistic about the growth potential there.

現在他們要求我們提高產能。事實上，他們希望將容量增加一倍，並要求在六月安裝。因此，考慮到該市場的發展速度以及我們的成功，我們對那裡的成長潛力非常樂觀。

That's a great color. And then -- normally, you guys take a very conservative approach. If I look at the slides, I think the midpoint of the light vehicle market outlook is down to I think that's just in line with S&P, which I think for the last couple of years, you've been haircutting, what gives you confidence that, that's right? Or is it just that you kind of broaden the range on the downside to kind of help frame things because of the uncertainty?

顏色真棒。然後——通常，你們採取非常保守的方法。如果我看一下幻燈片，我認為輕型汽車市場前景的中點下降到我認為這與標準普爾一致，我認為在過去幾年中，你一直在減持，是什麼讓你有信心，對嗎？或者只是因為存在不確定性，所以你擴大了下行範圍來幫助建構事物？

Yeah. So just to recap where were we in our February guide. We assumed overall light vehicle production down 1% to 3%. We're now expanding that to 2% to 4%. The question is why, it's really North America. When we think about North American production, that's where we're a little concerned we were assuming down 3% to 4% in February, and now we're assuming 7% to 12%. So that was really the shift that you see in those figures.

是的。因此，讓我們來回顧一下我們二月指南的內容。我們預計輕型車整體產量將下降 1% 至 3%。我們現在將其擴大至 2% 至 4%。問題是為什麼，它實際上是北美。當我們考慮北美產量時，我們有點擔心，我們假設 2 月產量會下降 3% 至 4%，而現在我們假設產量會下降 7% 至 12%。這就是您在這些數字中看到的真正的轉變。

That's very helpful. Thanks for taking my questions.

這非常有幫助。感謝您回答我的問題。

Thank you, Colin.

謝謝你，科林。

James Picariello, BNP Paribas.

詹姆斯·皮卡里洛，法國巴黎銀行。

Good morning everybody. Yeah, I actually was going to hit on North America light vehicle production -- down 7% to 12%. I think that's quite conservative for the second half and a great side with respect to the implications of your guidance framework. Just curious if you're seeing anything and build schedules this quarter or launch intentions for the second half that informs this view for North America? Thanks.

大家早安。是的，我實際上要談論北美輕型汽車產量——下降了 7% 至 12%。我認為這對於下半場來說是相當保守的，並且就你的指導框架的含義而言，這是一個很好的方面。我只是好奇，您是否看到了什麼，並製定了本季度的時間表或下半年的發布意向，以告知北美的這一觀點？謝謝。

Yeah. So maybe starting with the first quarter, production, very strong or what we expected. Second quarter orders also look good. There's nothing really in the midterm order bank where we see that there's going to be a major reduction here. But I think we all are anticipating some changes in the market as these tariffs take hold. And due to the overall macro uncertainty. So I think our guide is appropriate, and as things change, we're going to adjust quickly as we normally do.

是的。因此，也許從第一季開始，產量就非常強勁或符合我們的預期。第二季的訂單看起來也不錯。我們實際上並沒有看到中期訂單庫會大幅減少。但我認為，隨著這些關稅的實施，我們都預期市場將會發生一些變化。而且由於整體宏觀的不確定性。所以我認為我們的指南是合適的，隨著情況的變化，我們會像往常一樣快速調整。

Understood. And then, Craig, just to clarify, FX is an incremental headwind in terms of the guidance revision? I just want to clarify that. And then to also confirm your tariff recoveries are embedded in your poor sales range, is that correct? Thank you.

明白了。然後，克雷格，只是為了澄清一下，就指導修訂而言，外匯是一個漸進的阻力嗎？我只是想澄清這一點。然後也要確認您的關稅回收是否包含在您的不良銷售範圍內，對嗎？謝謝。

Sure, yeah. So from an FX standpoint, FX is a tailwind to our prior guidance. So it's about a $250 million tailwind. It's really coming from the euro and the Chinese renminbi, so against the US dollar. So that's how to think about from an FX standpoint. We have included tariff-related recoveries into our guide. We've effectively assumed and that we're expecting 100% recovery from our customers. As we get to the lower end of the guide, we did provide some discount, and that's really related to timing.

當然，是的。因此，從外匯的角度來看，外匯對我們先前的指導來說是一個順風。因此，這是一個約 2.5 億美元的順風。它實際上來自歐元和人民幣，因此是相對於美元而言的。這就是從外匯角度思考的問題。我們已將與關稅相關的復甦納入我們的指南中。我們已經有效地假設並期望我們的客戶能夠 100% 恢復。當我們到達指南的低端時，我們確實提供了一些折扣，這確實與時間有關。

A good example of that is in the second quarter, where we will have an impact from tariffs but we're going to be working through the recovery process with our customers, and there may be a timing component there.

一個很好的例子就是在第二季度，我們會受到關稅的影響，但我們將與客戶一起努力完成復甦過程，其中可能存在時間因素。

Appreciate it. Thanks.

非常感謝。謝謝。

Thank you.

謝謝。

Joseph Spak, UBS.

瑞銀的約瑟夫·斯帕克。

Thanks, Aaron. Maybe just sticking with tariffs for a second. So you're basically saying something over $200 million of impact for this year. It actually seems a little bit high relative to some disclosure you gave in the past, which is $865 million of annual imports into the US, but like 60% of that was Mexico, Canada, I know you've got some from Europe and a little bit from China that obviously has a very high tariff rate, but it still seems like a pretty high number. So can you just help us understand how you're getting to that level for three quarters a year?

謝謝，亞倫。也許只是暫時堅持關稅。所以你基本上是說今年的影響力將超過 2 億美元。事實上，相對於您過去披露的一些數據來說，這個數字似乎有點高，美國每年的進口額為 8.65 億美元，但其中 60% 來自墨西哥、加拿大，我知道還有一些來自歐洲，還有一小部分來自中國，顯然中國的關稅稅率很高，但這似乎仍然是一個相當高的數字。那麼，您能否幫助我們了解一下您是如何在一年中的三個季度內達到這一水平的？

Yeah, I can bring you some color there. So maybe, first of all, it's important to know. Our updated guidance includes everything we know about tariffs. So whether it's IEEPA tariffs, 232 auto parts, reciprocal tariffs or these retaliatory tariffs. Everything we know is in the guide.

是的，我可以帶給你一些色彩。因此，首先，了解這一點很重要。我們更新的指南涵蓋了我們所了解的有關關稅的所有資訊。因此，無論是IEEPA關稅、232汽車零件、互惠關稅或這些報復性關稅。我們所知道的一切都在指南中。

We've already started mitigation plans and customer recovery where short-term mitigation is not possible. From our view, this is a manageable item overall. So compared to six weeks ago, there's a lot more clarity out there. And I believe from a tariff impact, that's more manageable. My bigger concern is on the production outlook. But I'm confident in our teams will manage through that just as they always have.

對於無法進行短期緩解的情況，我們已經啟動了緩解計畫和客戶恢復計畫。我們認為，總體而言，這是一個可控的項目。因此與六週前相比，情況更加清晰了。我相信從關稅影響來看，這是更容易控制的。我更擔心的是生產前景。但我相信我們的團隊會像往常一樣度過難關。

To your point around, it's a little bit larger than maybe you expected. Just as a reminder, 55% to 60% of our COGS is material. So compared to some of our peers, where maybe labor is higher content, that's our material portion of sales, 100% in this market of our Canadian imports, are USMCA compliant and 70% of Mexico. So that gives you a little more color about the size of it.

就你所說的情況而言，它可能比你預期的要大一點。需要提醒的是，我們的 COGS 中有 55% 到 60% 是材料成本。因此，與我們的一些同行相比，勞動力含量可能更高，這是我們銷售額的重要組成部分，在這個市場上，我們 100% 的加拿大進口產品符合 USMCA 標準，70% 的墨西哥進口產品符合 USMCA 標準。這樣您就可以更詳細地了解它的大小。

And I would say the IEEPA portion of this is really only a quarter of the total amount. So for us, it's really important to take a global view, identify mitigating actions and customer recovery, and I'm really confident in our team and their ability to manage through this.

我想說的是，IEEPA 部分實際上只佔總金額的四分之一。因此，對我們來說，採取全球視野、確定緩解措施和客戶恢復措施非常重要，我對我們的團隊及其管理此問題的能力充滿信心。

Just maybe a quick follow, I just want to make sure I understand, you're saying that the imports you mentioned on the compliance that's sort of more direct, but then because you're buying some components, the cost of those components is going higher because either your sub-suppliers are facing tariff headwinds so they're passing it on for you to pass on? Is that what you mean?

可能只是快速跟進一下，我只是想確保我理解，您說您提到的進口合規性更直接，但是因為您購買了一些組件，所以這些組件的成本會更高，因為要么您的次級供應商面臨關稅阻力，所以他們將其轉嫁給您？你是這個意思嗎？

That's correct. We have both direct -- we call them direct impacts where we're producing, let's say, in Mexico, and we're striving to get to USMCA requirements. And then we have other ones that are more indirect, and that's where we purchase components that are being tariffed inbound. And that could be tariffed inbound in this part of the world or it could be somewhere else in the world. And I'm sure Pat is happy to walk you through that in details.

沒錯。我們有直接影響——我們稱之為直接影響，例如我們在墨西哥生產，我們正在努力滿足 USMCA 的要求。然後我們還有其他更間接的方式，那就是我們購買正在徵收進口關稅的零件。這可能對進口自世界的這個地區或世界其他地方的商品徵收關稅。我相信帕特很樂意向您詳細講解這一點。

I can't wait. Second question is just cash balance -- expected free cash flow for the year. Clearly, you guys are in a really good position here. I'm just wondering how you're thinking about deploying some of that cash and what you admit is a little bit of an uncertain environment, at least for the back half. And I guess the other part of that is, are you reconsidering any timing of buybacks given the multiples near five year lows?

我等不及了。第二個問題是現金餘額——預計全年的自由現金流。顯然，你們在這裡處於非常有利的地位。我只是想知道您打算如何部署部分現金，以及您是否承認至少對於下半年來說環境有點不確定。我想另一部分問題是，考慮到本益比接近五年來的最低點，您是否會重新考慮回購時機？

Yeah, thanks for the question. So agree, we have a nice strong balance sheet at the end of the quarter, and we're still expecting to generate about $700 million in free cash flow at the midpoint of our guide. Q1, great execution, 89% increase in free cash flow better by $280 million year-over-year so great Q1. When we take a step back, what's our goal with our cash and the strength of our balance sheet.

是的，謝謝你的提問。所以同意，我們在本季末擁有強勁的資產負債表，並且我們仍然預計在我們的指南中點產生約 7 億美元的自由現金流。第一季度，執行力出色，自由現金流增加 89%，比去年同期增加 2.8 億美元，因此第一季表現非常好。當我們退一步思考時，我們的現金目標和資產負債表實力是什麼。

Our focus is creating additional shareholder value, and it's going to come in multiple areas. It's going to either come from inorganic investment, dividends or buybacks like you saw last year. We continue to look at buybacks as a lever to create shareholder value. In fact, we repurchased $400 million last year. We're going to continue to look at it opportunistically as we work through Q2 and the balance of the year.

我們的重點是創造額外的股東價值，這將體現在多個領域。它要么來自無機投資、股息，要么來自回購，就像你去年看到的那樣。我們持續將回購視為創造股東價值的槓桿。事實上，我們去年回購了4億美元。在第二季和今年剩下的時間裡，我們將繼續抓住機會審視這個問題。

Appreciate it. Thank you.

非常感謝。謝謝。

Dan Levy, Barclays.

巴克萊銀行的丹·利維。

Great. Good morning. Thanks for taking the questions. I wanted to start first with a question on some of the M&A deals in the past. And so I recognize that charging, you've come to the conclusion that it's just -- it's not a profitable business. But maybe we can go back to some of the other deals you've done, AKASOL, Central. The market is different, we appreciate that, and you've done some restructuring. But are these deals still driving the initial benefits that you expected and so charging was a bit of a different situation. Just wondering how you're viewing maybe what other actions you may need to take to the portfolio.

偉大的。早安.感謝您回答這些問題。我想先問一個有關過去的一些併購交易的問題。所以我認識到收費，你已經得出結論，這只是——這不是一個有利可圖的業務。但也許我們可以回顧一下您做過的其他一些交易，AKASOL、Central。市場已經不同了，我們很欣賞這一點，而且你們也做了一些重組。但這些交易是否仍能帶來您所預期的初始收益，收費情況則有所不同。只是想知道您如何看待可能需要對投資組合採取哪些其他行動。

Yeah. So first of all, we won't comment on any particular acquisition that we've done we're continuously reviewing the portfolio to see areas we can strengthen that. In the case of charging, our overall assumptions change for that business, starting with the market outlook.

是的。首先，我們不會對我們進行的任何特定收購發表評論，我們會不斷審查投資組合，以尋找可以加強的領域。就充電而言，我們對該業務的整體假設發生了變化，首先是市場前景。

And then second, our inability to build scale in a timely period where we could reach our 15% return on invested capital targets. So we're going to take the same discipline that we're reviewing our portfolio with into future M&A. I think it's important that when things change, that we give it a critical eye and we take decisions as appropriate.

其次，我們無法及時擴大規模，實現 15% 的投資資本報酬率目標。因此，我們將在未來的併購中採取與審查投資組合相同的原則。我認為重要的是，當事情發生變化時，我們要以批判的眼光看待它，並做出適當的決定。

Okay, thank you. And then, similar as a follow-up, I wanted to ask about the margins in PowerDrive and battery, recognizing there's been obviously some lumpiness in the volumes. You're taking actions here on the portfolio side. You do have some restructuring, but maybe you could just refresh us on the path for both of those to reach breakeven, what other actions there are? And maybe just anything that's going to impact the direction of margins here?

好的，謝謝。然後，作為後續問題，我想詢問 PowerDrive 和電池的利潤率，因為我知道銷售量明顯存在一些波動。您正在就投資組合方面採取行動。您確實進行了一些重組，但也許您可以讓我們重新認識如何讓這兩項業務達到收支平衡，還有什麼其他行動嗎？也許有什麼事情會影響這裡的利潤方向？

Yeah. Dan, maybe I'll just comment on the first quarter. So when you look at PowerDrive Systems, really strong growth in the quarter, up 30% year-over-year. I mentioned earlier, light vehicle eProduct growth, up over 60% year-over-year across every major region of the world, North America, Europe and China. How did they convert on that growth? About $0.15 on the dollar. That's a nice strong conversion, it gives Joe and I a lot of confidence that we have that cost structure right. We fully expect that business to grow, and we expect it to increment in the mid-teens.

是的。丹，也許我只會對第一季發表評論。因此，當您查看 PowerDrive Systems 時，會發現本季成長確實強勁，較去年同期成長 30%。我之前提到過，輕型汽車電動車產品在全球各主要地區（北美、歐洲和中國）的成長率都超過 60%。他們是如何實現這種成長的？大約每美元 0.15 美元。這是一個很好的強勁轉變，它給了喬和我很大的信心，我們的成本結構是正確的。我們完全相信該業務將會成長，並且我們預計其成長率將達到十幾歲左右。

When you look at our battery business, down about 15% year-over-year not because of units, but because of battery cell prices coming down, which we spoke about throughout the first quarter. They did decrement at about $0.26 on the dollar. That's higher than we'd like, and that's why we took some of the actions to restructure North America that Joe spoke about.

我們的電池業務年減約 15%，這並不是因為銷量下降，而是因為電池價格下降，我們在第一季就討論過這個問題。它們確實以約 0.26 美元的價格下跌了。這比我們希望的要高，這就是我們採取喬所說的一些重組北美的行動的原因。

Okay, thank you.

好的，謝謝。

Thank you.

謝謝。

Mark Delaney, Goldman Sachs.

高盛的馬克·德萊尼。

Yes, good morning. Thank you very much for taking my questions. The company has products that are applicable for all power trains, as you mentioned and illustrated well by the various awards you announced this week. When you take all that into consideration, can you speak to your thoughts about the ability to drive revenue growth over market in the medium to longer term with both foundational and products, especially as you mentioned, OEMs are starting to settle on their updated plans for combustion and hybrid vehicles. Or do you see the top line going forward is more driven by eProducts?

是的，早安。非常感謝您回答我的問題。正如您所提到的，該公司擁有適用於所有動力傳動系統的產品，並且在本周宣布的各種獎項中得到了很好的說明。考慮到所有這些因素，您能否談談您對中長期透過基礎和產品推動市場收入成長的能力的看法，特別是正如您所提到的，原始設備製造商 (OEM) 開始確定其針對內燃機和混合動力汽車的最新計劃。或者您認為未來的營收成長將更多地受到電子產品的推動？

Sure. I can answer that. So when we think about our portfolio, where we're number one or number two on the foundational side and we're growing and building scale on the e-side. A beautiful part about hybrids, it pulls from both sides of the portfolio and the content per vehicle opportunity for us is quite high. So many of these products from our portfolio show up on these hybrids from our first quarter announcements, you can see we're winning solid businesses on these advanced hybrids.

當然。我可以回答這個問題。因此，當我們考慮我們的投資組合時，我們在基礎方面是第一或第二，並且我們在電子方面正在發展和擴大規模。混合動力車的一個美妙之處在於，它吸收了產品組合的雙方優勢，對我們來說，每輛車的內容機會相當高。從我們第一季的公告來看，我們產品組合中的許多產品都出現在這些混合動力車上，您可以看到我們在這些先進的混合動力車上贏得了穩固的業務。

So our focus is to drive outgrowth over and above our end markets, and it's through leveraging our portfolio and our core competence. And then as we do that, drive enhanced financial performance to expand margins and generate strong cash flow.

因此，我們的重點是推動超越終端市場的成長，這是透過利用我們的產品組合和核心競爭力來實現的。然後，當我們這樣做時，推動提高財務業績以擴大利潤率並產生強勁的現金流。

Thanks for that. My second question was on the China business. you reported some nice growth in China. You spoke about the positive feedback you had at the Shanghai Auto Show. But that said, can you talk about any incremental risk or challenges to the China business going forward when you consider the geopolitical and tariff environment, including potential for more pressure from local suppliers, insourcing or maybe any tariff cost specifically within China that you're going to need to manage and perhaps price for? Thanks.

謝謝。我的第二個問題是關於中國業務的。您報告了中國業務取得了良好的成長。您談到了在上海車展上收到的正面回饋。但話雖如此，考慮到地緣政治和關稅環境，您能否談談未來中國業務面臨的任何增量風險或挑戰，包括來自當地供應商的更多壓力、內部採購或特別是在中國境內的任何關稅成本，您需要管理和定價？謝謝。

Yeah. So to date, we continue to see positive trends in the Chinese business. As you mentioned, we modestly outperformed the market during the first quarter, and this was mainly supported by the eProduct growth. It is a competitive market, but I always like to come back to why do customers want to work with BorgWarner. And I heard this a lot when I was at the Shanghai Auto Show.

是的。因此到目前為止，我們繼續看到中國業務的積極趨勢。正如您所提到的，我們在第一季的表現略優於市場，這主要得益於電子產品的成長。這是一個競爭激烈的市場，但我總是喜歡回到為什麼客戶想要與博格華納合作的問題。我在上海車展上常聽到這樣的話。

First, it's just our ability to bring competitive technology to the market. The second is we got great customer intimacy. We've been in China over 30 years, and we've had terrific strong relationships especially with the domestic OEMs who really command more than 70% of that market today, and we're slightly overweight with the domestics. I think the third is really our speed to market. I gave the one example.

首先，這只是我們將競爭技術推向市場的能力。第二是我們與客戶建立了良好的親密關係。我們在中國市場已經經營了 30 多年，與國內原始設備製造商建立了非常牢固的關係，目前這些製造商佔據了中國市場 70% 以上的份額，而且我們與國內製造商的合作略有加重。我認為第三點實際上是我們的上市速度。我舉了一個例子。

So although it is a very competitive market, it's a very attractive market. We see the transition toward hybrids and new energy vehicles, and that's exciting for us because we really get to exercise our new portfolio, and we still feel quite optimistic about China.

因此，儘管這是一個競爭非常激烈的市場，但它也是一個非常有吸引力的市場。我們看到了向混合動力汽車和新能源汽車的轉變，這對我們來說是令人興奮的，因為我們真正運用了我們的新產品組合，而且我們仍然對中國市場感到十分樂觀。

And just specifically on tariffs in China. I mean I think you have an in-region -- for region approach in general. But are there any exports into China that are facing higher tariff costs you need to pass on?

具體來說就是中國的關稅問題。我的意思是，我認為你們總體上採取的是區域內——針對區域的方法。但是，是否有任何出口到中國的商品面臨更高的關稅成本，而你們需要將其轉嫁出去呢？

Yeah, I think the largest one that probably most people speak about is semiconductors. So we are working on mitigation actions for semiconductors and there may be one or two other commodities. But as I stated earlier on the call, for me, it's a very manageable issue for us. So I'm confident our teams will continue to find mitigating actions.

是的，我認為大多數人談論的最大的一個領域是半導體。因此，我們正在針對半導體採取緩解措施，並且可能還有一兩種其他商品。但正如我之前在電話中所說的那樣，對我來說，這是一個非常容易解決的問題。因此我相信我們的團隊將繼續尋找緩解措施。

Okay, thank you.

好的，謝謝。

Emmanuel Rosner, Wolf Research.

埃馬紐埃爾·羅斯納（Emmanuel Rosner），沃爾夫研究公司。

Great. Thank you so much. I was hoping for a follow-up question on the tariff cost of north of $200 million. And I'm not sure I fully understand where they come from. Anyway, can you give us some color or maybe bucket it in terms of what really goes into these tariff costs? Because as was mentioned earlier in the call, I think you crossed -- the US border was maybe like $900 million of parts.

偉大的。太感謝了。我希望能就超過 2 億美元的關稅成本提出後續問題。而且我不確定我是否完全理解它們來自哪裡。無論如何，您能否給我們一些細節，或就這些關稅成本的實際組成進行分類？因為正如之前在通話中提到的那樣，我認為你跨越了——美國邊境的零件可能有價值 9 億美元。

So $200 million-plus of that would seem to be like 25% of the total, but yet you have high USMCA compliance. So maybe if there's a way to bucket what goes into that $200 million? And also, how much of those recoveries have already been negotiated with customers versus email negotiations that still need to happen?

因此，其中 2 億多美元似乎只佔總額的 25%，但你們對 USMCA 的遵守程度很高。那麼，是否有辦法將這 2 億美元分成幾個部分呢？此外，有多少追償已經與客戶協商完畢，有多少仍需透過電子郵件進行協商？

Yeah. So when we look at our overall exposure, like we've been discussing, it's about 1.6% of sales across the organization. And when you break it into its pieces, about 50% is IEEPA-related and auto parts 232 related, the remaining 50% is China retaliatory typical related. So that gives you some detail. Again, Pat can take you through even more details after the call.

是的。因此，當我們查看我們的整體曝光率時，就像我們一直在討論的那樣，它約佔整個組織銷售額的 1.6%。如果將其分解開來，大約 50% 與 IEEPA 和汽車零件 232 條款有關，其餘 50% 與中國典型的報復性措施有關。這樣你就能看到一些細節了。再次，通話結束後，Pat 可以向您了解更多詳細資訊。

From a negotiation standpoint, what's our goal first is to quantify it, which we have. Second, we're looking to mitigate. And third, we're working through the recovery mechanisms with our customers.

從談判的角度來看，我們的首要目標是量化它，而我們已經做到了。其次，我們正在尋求緩解。第三，我們正在與客戶合作建立恢復機制。

Right. So where are we in this process?

正確的。那麼我們目前處於這個過程的哪個階段呢？

So if we talk specifically about USMCA, we're striving to first achieve USMCA compliance. If you look at Mexico, we're at about 70% and climbing. For the noncompliant part, actually, we've recovered where we've got line of sight on about 50% of that from customers. So well underway. Our teams are stood up, we've dusted off what we call the inflation playbook, and we're very versed in how to negotiate with customers on these recoveries.

因此，如果我們具體談論 USMCA，我們首先要努力實現 USMCA 合規性。如果你看看墨西哥，我們的這一比例已經達到約 70%，而且還在不斷上升。對於不合規的部分，實際上，我們已經從客戶那裡恢復了大約 50% 的視線。進展順利。我們的團隊已經做好準備，重新制定了所謂的通貨膨脹策略，並且我們非常了解如何與客戶就這些復甦進行談判。

Great. And then a follow-up on eProducts. I think your prior guidance embedded strong growth in the eProduct components business, maybe $0.5 billion or more driven by these new launches. Can you update us on -- I mean, you gave some color on how those launches are going, and obviously, Q1 progress was strong. What's embedded in the updated guidance from an eProduct point of view?

偉大的。然後對 eProducts 進行跟進。我認為您先前的指導體現了電子產品組件業務的強勁成長，這些新產品的推出可能會帶來 5 億美元或更多的收入。您能否向我們通報最新情況——我的意思是，您介紹了一下這些發布的進展情況，顯然第一季的進展很強勁。從電子產品的角度來看，更新後的指南包含哪些內容？

Yeah. So we're not providing any detail on the guidance with regard to eProducts. Nevertheless what we’ve shared is the large number of launches we have on the eProduct side. Over 20 of them ongoing. And as those products launch, we believe that's going to continue to create a tailwind for us on eProduct growth.

是的。因此，我們沒有提供有關電子產品指導的任何詳細資訊。儘管如此，我們分享的是我們在電子產品方面推出的大量產品。其中有 20 多個正在進行中。隨著這些產品的推出，我們相信這將繼續為我們的電子產品成長帶來順風。

So we haven't seen substantial delays on these launches. We continue to monitor it closely with customers. But from where we sit today, we feel quite good about the first quarter and the future prospects of eProduct growth.

因此，我們並未看到這些發射出現重大延遲。我們將繼續與客戶密切關注此事。但從我們今天所處的位置來看，我們對第一季以及未來電子產品成長的前景感到相當樂觀。

I can share with you our eProduct sales in the first quarter, which will be published later today with our 10-Q. We were right around $640 million and that was up from about $500 million in Q1 of last year.

我可以與大家分享我們第一季的電子產品銷售情況，該資訊將於今天晚些時候與我們的 10-Q 一起發布。我們的營收約為 6.4 億美元，高於去年第一季的 5 億美元。

Great. Thanks for the color.

偉大的。謝謝你的顏色。

Luke Junk, Baird & Company.

路克瓊克 (Luke Junk)，貝爾德公司 (Baird & Company)。

Hi, good morning. Thanks for the second question. We covered a lot so far today so maybe just one question for me. Hoping you could just speak to tariff recoveries relative to the business segments maybe and if there's anything worth specking out as we think about modeling across the business and thinking maybe foundational versus eProduct at a high level and things that may be, at first, what might not be obvious in terms of the battery footprint is in the US, but I'm assuming there's some components coming in from China there and then maybe rare earth into PDS as well. Thank you.

嗨，早安。謝謝您的第二個問題。今天到目前為止我們討論了很多內容，所以也許我只需要問一個問題。希望您能談談與業務部門相關的關稅回收情況，以及在我們考慮對整個業務進行建模並在高層次上考慮基礎產品與電子產品時，是否有任何值得指出的地方，以及一開始可能並不明顯的電池足跡在美國，但我假設那裡有一些來自中國的零部件，然後也許稀土也進入了PDS。謝謝。

Yeah, I can speak to that. We're not going to break it out by segment. I think what's more important is, first, we spent a lot of time clarifying the impact of tariffs. So compared to four or six weeks ago, we've got quite good clarity on it. Then it's all about mitigating actions, how can we achieve USMCA compliance?

是的，我可以談論這個。我們不會按部分進行細分。我認為更重要的是，首先，我們花了很多時間來澄清關稅的影響。因此，與四周或六週前相比，我們對此有了相當清晰的認識。那麼一切都與緩解措施有關，我們如何實現 USMCA 合規？

Are there other ways to mitigate some of the impacts? And then finally, beginning the customer recovery discussions, which we've already done. So we're well underway here. I think we're quite confident in managing through this topic independent of which of the four businesses that's flowing through. With regard to the battery side, maybe you can clarify your question again?

有其他方法可以減輕一些影響嗎？最後，開始客戶恢復討論，我們已經完成了。我們現在進展順利。我認為，無論涉及哪四個業務，我們都非常有信心處理這個問題。關於電池方面，也許您可以再次澄清您的問題？

Yeah, just in terms of any components, I mean, the footprint for battery in US, in South Carolina so not a Mexico or USMCA compliance question, but just in terms of components that might be coming out of China slowing into battery?

是的，就任何組件而言，我的意思是，美國、南卡羅來納州的電池足跡，所以不是墨西哥或 USMCA 合規問題，而是就可能從中國出口到電池領域的組件而言？

Yeah. So that business, like the others will have some impact due to tariffs, but again, very same playbook, working to mitigate and then where we're unable to mitigate in the short term, discussing with customers our plans to recover, which, by the way, we expect 100% from customers on the short-term mitigation.

是的。因此，這項業務和其他業務一樣，也會受到關稅的一些影響，但同樣，我們的策略是努力緩解影響，如果短期內我們無法緩解影響，我們會與客戶討論我們的恢復計劃，順便說一句，我們預計客戶在短期內會 100% 地緩解影響。

And when you think about the battery business, it's really those cells that come from Korea. So that's the major impact for that business.

當你想到電池業務時，你會發現這些電池實際上來自韓國。所以這對該業務來說是一個重大影響。

Got it, that's very helpful. Thank you.

明白了，非常有幫助。謝謝。

Edison Yu, Deutsche Bank.

德意志銀行的 Edison Yu。

Hi, thanks so much. This is Winnie Taung on for Edison. I was wondering if you can help us break down the outflows for this year of 240 bps to 400 bps. Is there a way to sort of break that down between foundational versus eProduct?

你好，非常感謝。我是 Winnie Taung，代表 Edison 發言。我想知道您是否可以幫助我們將今年的資金流出量細分為 240 個基點至 400 個基點。有沒有辦法將其細分為基礎產品和電子產品？

Yeah. We don't provide that breakout. We're looking to outgrow on both sides of our portfolio, whether that's on the foundational side or the eProduct side of the portfolio.

是的。我們不提供這種突破。我們希望我們的產品組合在兩個方面都能夠實現成長，無論是在基礎產品方面還是在電子產品方面。

Okay, got it. And then just on maybe M&A opportunities, how you're viewing the pipeline of current macro environment. If acquisitions and bolt-ons are still sort of the strategy for eProduct growth in the mid- to long term.

好的，明白了。然後，也許只是關於併購機會，您如何看待當前宏觀環境的管道。如果收購和附加措施仍然是中長期 eProduct 成長的策略。

Sure. We still remain active reviewing our pipeline for M&A. So we especially think with all the turbulence in the market, it may create some compelling opportunities for us. And we're not limiting our scope on it. The way to think about it is we've really opened up the aperture in acquisition targets to leverage our core competence and where we can drive growth and shareholder value but we've raised the bar in terms of criteria. So to review those, first of all, any target needs to really have industrial logic. How does that leverage our core competence and drive growth.

當然。我們仍在積極審查我們的併購管道。因此，我們尤其認為，在市場動盪的情況下，它可能會為我們創造一些引人注目的機會。我們不會將範圍限制於此。我們可以這樣想：我們確實在收購目標方面開闢了空間，以利用我們的核心競爭力，並推動成長和股東價值，但我們在標準方面提高了門檻。因此，回顧這些，首先，任何目標都需要真正具有工業邏輯。這如何利用我們的核心競爭力並推動成長。

The second is near-term accretion. We want to select targets that are going to be accretive, more near term in nature. And then lastly is valuation. We don't want to overpay. And especially during times like today, where there's a lot of turmoil, we need to run a lot of different scenarios around these targets to make sure that over the majority of scenarios, the valuation is consistent with our willingness to pay for the target.

第二是近期的增生。我們希望選擇具有增值性、更短期性質的目標。最後是估值。我們不想多付錢。特別是在今天這樣動盪的時期，我們需要圍繞這些目標運行許多不同的情景，以確保在大多數情況下，估值與我們為目標支付的意願一致。

So with that said, we've used the first quarter to look through the pipeline. We've actually passed on a number of targets because they didn't meet one of those street criteria. So we want to continue in a disciplined way with the M&A. And as Craig had mentioned, we're at a strong cash position, and we're not afraid to use all the tools in the toolbox, including buybacks, if necessary.

因此，我們已經利用第一季的時間查看了管道。事實上，我們已經放棄了一些目標，因為它們不符合其中一條街道標準。因此，我們希望繼續以有紀律的方式進行併購。正如克雷格所提到的，我們的現金狀況良好，而且我們不怕使用工具箱中的所有工具，包括在必要時進行回購。

That's helpful. Thank you.

這很有幫助。謝謝。

Thank you.

謝謝。

Thank you all for your questions today. If you have any follow-ups, feel free to reach out to me or my team. With that, Wyatt you can go ahead and conclude today's call.

感謝大家今天的提問。如果您有任何後續問題，請隨時與我或我的團隊聯繫。就這樣，懷亞特，你就可以繼續並結束今天的通話了。

Thank you. This concludes the BorgWarner 2025 first quarter results conference call. You may now disconnect.

謝謝。博格華納 2025 年第一季業績電話會議到此結束。您現在可以斷開連線。