Garrett Motion Inc (GTX) 2023 Q2 法說會逐字稿

Good day. 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. (Operator Instructions)

再會。我叫莎拉，今天早上我將擔任您的接線員。我歡迎大家參加 Garrett Motion 第二季度財務業績電話會議。此通話正在錄音，今天晚些時候將提供重播。 （操作員說明）

I would now like to hand the call over to Eric Birge, Head of Investor Relations.

我現在想將電話轉給投資者關係主管埃里克·伯奇 (Eric Birge)。

Thank you, Sarah. Good morning, and welcome, everyone. Thank you for attending Garrett Motion's 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 Motion's website at investors.garrettmotion.com. There, you will also find links for the SEC filings, along with other important information about our company. Turning to Slide 2.

謝謝你，莎拉。早上好，歡迎大家。感謝您參加 Garrett Motion 第二季度財務業績電話會議。在我們開始之前，我想提一下，今天的演示和收益發布可在 Garrett Motion 網站 Investors.garrettmotion.com 的 IR 部分獲取。在那裡，您還可以找到 SEC 文件的鏈接以及有關我們公司的其他重要信息。轉到幻燈片 2。

We note that this presentation contains forward-looking statements within the meanings of the Securities Exchange Act. We encourage you to read the risk factors that are contained within our filings in the Securities and 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.

我們注意到，本演示文稿包含《證券交易法》含義內的前瞻性陳述。我們鼓勵您閱讀我們向美國證券交易委員會提交的文件中包含的風險因素，了解我們業務中的風險和不確定性，並了解前瞻性陳述是對未來業績的估計，應如此對待。

The forward-looking statements represent management's expectations 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 terms diesel and gasoline only.

這些前瞻性陳述僅代表管理層截至目前的預期，公司不承擔任何更新這些前瞻性陳述的義務。今天的演示還包括非公認會計準則衡量標準，以描述我們如何管理和運營我們的業務。我們將這些衡量標準與最直接可比的公認會計原則衡量標准進行了協調。我們鼓勵您在新聞稿和幻燈片演示文稿的附錄中檢查這些調節。此外，在今天的演示和評論中，我們可能僅使用術語“柴油”和“汽油”來提及輕型車柴油和輕型車汽油。

With us on today's call is Olivier Rabiller, 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.

參加今天電話會議的是 Garrett 總裁兼首席執行官 Olivier Rabiller；以及蓋瑞特高級副總裁兼首席財務官 Sean Deason。我現在將電話轉交給奧利維爾。

Thanks, Eric, and thanks, everyone, for joining Garrett's second quarter earnings conference call. I will begin my remarks on Slide #3. 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.

謝謝埃里克，也謝謝大家參加加勒特的第二季度收益電話會議。我將從幻燈片 #3 開始我的發言。我首先要感謝整個蓋瑞特團隊，通過持續關注卓越運營和執行力，交付了非常強勁的季度業績，使我們在所有關鍵財務指標上都表現出色。

In Q2 2023, we delivered net sales of a little more than $1 billion, up 18% on a reported basis and up 19% on a 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.

2023 年第二季度，我們的淨銷售額略高於 10 億美元，按報告計算增長 18%，按固定匯率計算增長 19%。與去年相比，這一收入增長的推動因素包括新產品的增加、歐洲和北美許多原始設備製造商的補貨以及中國新冠疫情限制措施的結束。本季度調整後 EBITDA 為 1.7 億美元，去年同期為 1.38 億美元。我們的銷量顯著增加，加上持續的運營業績，使我們的調整後 EBITDA 利潤率從去年第二季度的 16.1% 提高到 16.8%。

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 convert quickly in cash and increase in revenue.

所有這些因素使我們在本季度結束時調整後的自由現金流達到1.4 億美元，高於上年同期的2300 萬美元，並且在有利的營運資本的推動下實現了極其強勁的業績，因為我們成功地將第二季度的收入增長轉化為現金。這再次凸顯了我們獨特的低營運資金需求的優勢，使蓋勒特能夠快速轉換現金並增加收入。

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.

在本季度，我們還成功執行了資本結構轉型，產生了一類普通股。您可能還記得，我們去年就開始了這一旅程，當時我們全額贖回了所有 B 系列股票，然後開始以現金支付 A 系列股息。這一轉型的最後一步在第二季度完成，我們將所有 A 系列股票轉換為普通股。作為其中的一部分，我們還同意在轉換前回購 5.7 億美元的 A 系列股票，資金由新的 7 億美元的 B 期定期貸款提供資金。

All of this has brought our market cap to about $2 billion and has increased the market liquidity of our common share by about 5x. 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 25, we have already repurchased a total of $80 million of common shares.

所有這些使我們的市值達到約 20 億美元，並使我們普通股的市場流動性增加約 5 倍。與此同時，該公司還將現有的股票回購授權增加至2.5億美元，作為轉換後支持股票的額外槓桿。截至7月25日，我們已經回購了總計8000萬美元的普通股。

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 predevelopment contract for high-speed e-Traction system and the first predevelopment contract for our innovative e-cooling compressor. We will get into more details regarding this on the next slide.

第二季度的特點不僅是我們非常強勁的財務業績和資本結構的簡化，我們還獲得了第二份高速電子牽引系統預開發合同和第一份創新電子冷卻壓縮機預開發合同。我們將在下一張幻燈片中詳細介紹這一點。

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 details later in the presentation. Considering the strong cash generation we achieved in Q2, we have also made the decision to repay $200 million of debt in Q3, a strong first step in delivering towards our target net leverage ratio of 2x.

現在，根據上半年的業務表現，我們再次提高了對全年的展望，肖恩將在稍後的演示中向您詳細介紹這一點。考慮到我們在第二季度實現的強勁現金生成，我們還決定在第三季度償還 2 億美元的債務，這是實現 2 倍目標淨槓桿率的強有力的第一步。

Turning now to Slide 4. During the quarter, we were awarded 2 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.

現在轉向幻燈片 4。本季度，我們獲得了 2 個 E-壓縮機新項目，這項技術結合了我們在空氣壓縮和高速電動機方面的專業知識。兩者都將安裝在歐洲主要原始設備製造商的混合動力系統上。

For our on-highway business, we won 2 new programs establishing a new position with a major truck maker 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.

對於我們的公路業務，我們贏得了兩個新項目，在中國一家大型卡車製造商中建立了新的地位。這支持了我們商用車的增長，這是我們業務的一個非常重要的組成部分。我們還將繼續推出我們之前宣布的第一個非公路氫 ICE 應用程序。

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 predevelopment 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.

轉向我們的零排放產品，如前所述，我們繼續積蓄動力，並通過授予我們的第二份高速、高功率密度電子動力總成預開發合同，再創一個成功的季度。這再次表明我們的客戶對我們差異化的電力技術解決方案越來越感興趣。

In addition, during the second quarter, our investments in zero emission technologies continued to show success. I'm very pleased to announce that we won our first predevelopment for our high-performance e-cooling compressor, which provides a differentiated solution for electric vehicle thermal management.

此外，第二季度，我們對零排放技術的投資繼續取得成功。我很高興地宣布，我們贏得了高性能電子冷卻壓縮機的首次預開發，該壓縮機為電動汽車熱管理提供了差異化的解決方案。

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.

該產品利用我們在高速電動機和控制方面的專業知識，結合我們行業領先的空氣壓縮能力，可提供電動汽車所需的更小的包裝、更輕的重量和更高的冷卻功率。這項獨特的技術使電動汽車的冷卻能力發生了巨大變化，並為原始設備製造商提供了改變遊戲規則的機會，即冷卻電動動力系統的方式，這是快速充電和高連續功率使用的關鍵推動因素。

These predevelopment 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 vehicle. With these awards and our planned launch of 5 applications of our Gen2 and Gen3 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.

這些預開發成果證明，我們為電動汽車開發的技術具有差異化，並且是我們的客戶所需要的，以應對下一代零排放汽車的挑戰。憑藉這些獎項以及我們計劃推出Gen2 和Gen3 氫燃料電池壓縮機的5 個應用，我們仍然致力於實現到2030 年零排放汽車產品年銷售額達到10 億美元的目標，且不低於我們現有業務的利潤率。

I will now turn things over to Sean that will provide more insights into our financial results.

我現在將把事情交給肖恩，他將為我們的財務業績提供更多見解。

Thanks, Olivier, and welcome, everyone. I will begin my remarks on Slide 5. Looking at the upper left-hand graph, you will see reported net sales for the last 10 quarters, with Q2 2023 at just over $1 billion, up from Q2 of 2022 by 18% on a GAAP basis and 19% on a constant currency basis, as previously mentioned by Olivier. This growth was driven by strong customer demand across key product lines and is the highest we have achieved in the last 2 years. Our regional sales breakdown continues to be stable, with 49% of Q2 sales coming from Europe, 30% from Asia and 19% from North America.

謝謝奧利維爾，歡迎大家。我將從幻燈片5 開始我的發言。查看左上方的圖表，您將看到過去10 個季度報告的淨銷售額，其中2023 年第二季度的淨銷售額略高於10 億美元，按GAAP計算，較2022 年第二季度增長18%正如 Olivier 之前提到的，按固定匯率計算為 19%。這一增長是由關鍵產品線的強勁客戶需求推動的，是我們過去兩年取得的最高增長。我們的區域銷售細分繼續保持穩定，第二季度銷售額的 49% 來自歐洲，30% 來自亞洲，19% 來自北美。

Looking at the upper right-hand side of the page, Q2 2023 adjusted EBITDA of $170 million was up 23% from $138 million last year. The adjusted EBITDA margin in the period was 16.8%, up from 16.1%, primarily due to increased sales and operational execution as we continue to deliver productivity and pass-through inflation.

查看頁面右上角，2023 年第二季度調整後 EBITDA 為 1.7 億美元，比去年的 1.38 億美元增長 23%。該期間調整後的 EBITDA 利潤率為 16.8%，高於 16.1%，這主要是由於我們繼續提高生產力和傳遞通脹，從而增加了銷售和運營執行力。

On the bottom left graph, you see that Garrett generated positive adjusted free cash flow of $140 million in Q2 2023, up from $23 million in Q2 of 2022. Compared to last year, this favorability is driven by increased revenues and less volatile customer demand as supply chains continue to stabilize, driving a positive working capital contribution. Again, our free cash flow conversion to adjusted EBITDA averages approximately 60%, but is higher when revenue is growing.

在左下圖上，您可以看到Garrett 在2023 年第二季度產生了1.4 億美元的正調整自由現金流，高於2022 年第二季度的2300 萬美元。與去年相比，這種好感是由收入增加和客戶需求波動較小推動的供應鏈持續穩定，帶動營運資金貢獻積極。同樣，我們的自由現金流到調整後 EBITDA 的平均轉換率約為 60%，但當收入增長時會更高。

Our results demonstrate that over the past 2.5 years, in an extremely volatile macro and demand environment, our ability to execute operationally and flex our variable cost structure has enabled us to consistently deliver solid results.

我們的結果表明，在過去 2.5 年裡，在極其不穩定的宏觀和需求環境中，我們執行運營和靈活可變成本結構的能力使我們能夠始終如一地交付可靠的成果。

Turning to Slide 6. We show our Q2 net sales bridge by product category as compared with the same period last year. All verticals improved compared to the prior year, with gasoline products up 34% at constant currency, adding $118 million in sales. Gasoline products now comprise 45% of reported net sales versus 40% last year, driven by share of demand gains as new products have launched and continue to ramp up, combined with the end of COVID restrictions in China when compared to last year.

轉向幻燈片 6。我們按產品類別顯示了與去年同期相比的第二季度淨銷售額橋。與上一年相比，所有垂直行業均有所改善，汽油產品按固定匯率計算增長了 34%，銷售額增加了 1.18 億美元。汽油產品目前佔報告淨銷售額的 45%，而去年為 40%，這是由於新產品的推出和持續增加而帶來的需求份額增長，加上與去年相比，中國取消了新冠疫情限制。

Diesel products grew 9% at constant currency, contributing an incremental $21 million to sales compared to the prior year. Overall, diesel now comprises 26% of sales. Commercial vehicles grew 10% at constant currency, primarily driven by a more favorable product mix in North America and Europe from both on- and off-highway platforms and represented 17% of total net sales.

按固定匯率計算，柴油產品增長了 9%，與上一年相比，銷售額增加了 2100 萬美元。總體而言，柴油目前佔銷售額的 26%。按固定匯率計算，商用車增長了 10%，這主要是由於北美和歐洲的公路和非公路平台產品組合更加有利，佔總淨銷售額的 17%。

And lastly, our aftermarket business continues to perform, growing 6% at constant currency over the last year and now comprises 11% of net sales. As mentioned earlier, we have seen growth across all verticals this quarter compared to the prior year. But as a percentage of total sales, diesel, commercial vehicle and aftermarket were all down slightly as strong share of demand gains drove significantly more growth in gasoline compared to the other verticals.

最後，我們的售後市場業務繼續表現出色，按固定匯率計算，去年增長了 6%，目前占淨銷售額的 11%。如前所述，與上一年相比，本季度所有垂直領域均出現增長。但柴油、商用車和售後市場佔總銷量的百分比均略有下降，因為與其他垂直行業相比，需求增長的強勁份額推動了汽油的顯著增長。

Moving to Slide 7. We show our Q2 adjusted EBITDA bridge compared with the same period last year. Adjusted EBITDA of $170 million represented a $32 million improvement over the prior period. Increased sales accounted for $46 million, which was partially offset by the impact of unfavorable product mix as smaller engine gasoline products continued to ramp up.

轉向幻燈片 7。我們展示了與去年同期相比第二季度調整後的 EBITDA 橋。調整後 EBITDA 為 1.7 億美元，較上一期增加 3,200 萬美元。銷售額增加了 4600 萬美元，但由於小型發動機汽油產品的持續增加，不利的產品組合的影響部分抵消了這一增長。

Our overall operating performance was a net positive of $9 million as we continue to deliver productivity and pass-through inflation while dedicating over 50% of our R&D expenditures to new technologies, consistent with prior quarters. Our strong second quarter results reflect our significant operating momentum, along with strong industry volume in key regions. We continue to monitor specific regional industry risks such as the ongoing UAW negotiations in North America and the effectiveness of potential economic stimulus in China.

我們的整體運營業績淨值為 900 萬美元，因為我們繼續提高生產力和傳遞通脹，同時將超過 50% 的研發支出用於新技術，與前幾個季度一致。我們強勁的第二季度業績反映了我們強勁的運營勢頭以及關鍵地區強勁的行業銷量。我們持續關注特定區域行業風險，例如北美正在進行的UAW談判以及中國潛在經濟刺激措施的有效性。

Turning to Slide 8. We show the adjusted EBITDA to adjusted free cash flow bridge for Q2 2023. Garrett delivered strong adjusted free cash flow of $140 million in the quarter. Adjusted free cash flow in Q2 benefited from working capital as a source of $32 million, as revenues improved and customer demand and supply chains continued to stabilize. As mentioned earlier, our free cash flow conversion to adjusted EBITDA averages approximately 60%, but it is higher when revenue is growing.

轉向幻燈片 8。我們展示了 2023 年第二季度調整後的 EBITDA 與調整後的自由現金流橋。Garrett 在本季度實現了 1.4 億美元的強勁調整後自由現金流。隨著收入的改善以及客戶需求和供應鏈的持續穩定，第二季度調整後的自由現金流受益於 3200 萬美元的營運資金。如前所述，我們的自由現金流轉化為調整後 EBITDA 的平均比率約為 60%，但當收入增長時，該比率會更高。

Capital expenditures and cash tax were in line with expectations for Q2, but are expected to be higher in the second half. And this is reflected in our updated full year outlook I will discuss later. Cash interest increased to $14 million due to the issuance of our new $700 million term loan B. Overall, this is one of the best cash flow generation quarters in a volatile, but improving environment that allowed Garrett to improve liquidity, which I will discuss in more detail on the next slide.

資本支出和現金稅符合第二季度的預期，但預計下半年會更高。這反映在我們更新的全年展望中，我將在稍後討論。由於我們發放了新的7 億美元定期貸款B，現金利息增加至1,400 萬美元。總體而言，這是在動盪但不斷改善的環境中最好的現金流生成季度之一，使Garrett 能夠改善流動性，我將在下一張幻燈片有更多詳細信息。

Turning to Slide 9. I want to briefly walk through the changes to our share count and our capital structure that occurred in Q2. As illustrated in the chart on the upper left, you can see how we walk from our previous common market capitalization of almost $500 million in Q1 to a $2 billion market capitalization at the end of Q2, driven by the conversion of the Series A shares into common shares. Part of this transaction, we also repurchased $570 million of Series A shares and increased our share repurchase program to $250 million, of which we have utilized $80 million as of July 25. We ended the quarter with only one class of equity outstanding, totaling 264 million common shares.

轉向幻燈片 9。我想簡要介紹一下第二季度發生的股票數量和資本結構的變化。正如左上角的圖表所示，您可以看到我們如何從第一季度的近 5 億美元的共同市值，到第二季度末的 20 億美元的市值，這主要得益於 A 輪股票轉換為普通股。作為此次交易的一部分，我們還回購了5.7 億美元的A 輪股票，並將股票回購計劃增加到2.5 億美元，截至7 月25 日，我們已使用其中8000 萬美元。本季度末，我們僅發行了一類已發行股票，總計264 股。萬普通股。

Moving to the table on the upper right, we ended Q2 with a strong liquidity position of just over $1 billion, comprised of $570 million of undrawn revolving credit facility capacity, which we increased during Q2 by $95 million and $478 million of unrestricted cash, which increased $187 million sequentially, driven by cash flow generation as discussed earlier, and the net inflows from the term loan B after executing the conversion of the Series A shares.

轉到右上角的表格，我們在第二季度結束時擁有略高於10 億美元的強勁流動性頭寸，其中包括5.7 億美元的未提取循環信貸額度（我們在第二季度增加了9500 萬美元）和4.78 億美元的非限制性現金，其中受到前面討論的現金流產生以及執行 A 系列股票轉換後 B 期貸款淨流入的推動，該公司連續增加了 1.87 億美元。

Given the strong operating performance in Q2 and our increased outlook for 2023, which I will discuss on the next slide, we also plan to pay down our outstanding debt by $200 million, the first step towards achieving our target net leverage ratio of 2x by the end of 2024.

鑑於第二季度強勁的經營業績以及我們對2023 年前景的展望（我將在下一張幻燈片中討論），我們還計劃償還2 億美元的未償債務，這是實現2 倍淨槓桿率目標的第一步2024 年底。

Moving now to Slide 10. Our stronger volumes and robust operational performance are driving better-than-expected financial results year-to-date. As a result, we are updating our full year 2023 outlook to reflect the strength of our performance. On this slide, you can see the updated macro assumptions and financial ranges that imply the following at the midpoint: net sales of $3.93 billion; net sales growth at constant currency of 8%; net income of $273 million; adjusted EBITDA of $645 million, implying a margin of 16.4%; and net cash provided by operating activities of $460 million; and adjusted free cash flow of $390 million, which reflects the expected better operational performance, partially offset by higher interest expense from the new term loan B. For greater detail, I'd point you to the reconciliations of each of these metrics to the nearest GAAP figure, as shown in the appendix to this presentation.

現在轉到幻燈片 10。我們強勁的銷量和強勁的運營業績正在推動今年迄今為止的財務業績好於預期。因此，我們正在更新 2023 年全年展望，以反映我們的業績實力。在這張幻燈片上，您可以看到更新的宏觀假設和財務範圍，這意味著中點如下：淨銷售額 39.3 億美元；按固定匯率計算，淨銷售額增長 8%；淨利潤2.73億美元；調整後 EBITDA 為 6.45 億美元，意味著利潤率為 16.4%；經營活動提供的現金淨額為 4.6 億美元；調整後的自由現金流為3.9 億美元，這反映了預期的更好的運營業績，部分被新定期貸款B 的更高利息支出所抵消。有關更多詳細信息，我會向您指出每個指標與最接近值的調節結果GAAP 數據，如本演示文稿的附錄所示。

Turning now to Slide 11. We bridge our prior year results to our updated outlook. Strong volume and revenue conversion are partially offset by unfavorable mix as revenue growth is mainly driven by share of demand gains as small gasoline engine applications continue to ramp up throughout 2023. We continue to work with our customers to pass through inflationary pressures and deliver productivity while still investing in new technologies.

現在轉向幻燈片 11。我們將上一年的業績與最新的展望聯繫起來。強勁的銷量和收入轉換被不利的組合所部分抵消，因為隨著小型汽油發動機應用在2023 年繼續增加，收入增長主要由需求增長份額推動。我們將繼續與客戶合作，克服通脹壓力並提高生產力，同時仍在投資新技術。

We are also planning for a stronger euro versus the U.S. dollar, at an exchange rate of 1.11 in the second half. In summary, our updated 2023 outlook reflects strong operational execution as we continue to grow from share of demand gains and convert revenue into earnings and cash flow in a volatile but improving macroeconomic environment.

我們還計劃下半年歐元兌美元走強，匯率為 1.11。總之，我們更新的 2023 年展望反映了我們強勁的運營執行力，因為我們在動盪但不斷改善的宏觀經濟環境中繼續從需求增長份額中增長並將收入轉化為收益和現金流。

I will now hand it back to Olivier for his closing remarks.

現在我將把它交還給奧利維爾，讓他作結束語。

Thanks, Sean. Wrapping up, a summary of Q2 on Slide 11. We delivered the best quarterly revenue in 2 years and delivered on all key financial metrics with our strong earnings and cash performance. We also completed the transformation of our capital structure with the conversion of our Series A shares into common shares, increasing our market cap to about $2 billion with 5x the liquidity. And we now plan to pay down $200 million of debt in the third quarter.

謝謝，肖恩。最後，幻燈片 11 上對第二季度的總結。我們實現了兩年來最好的季度收入，並憑藉強勁的盈利和現金表現實現了所有關鍵財務指標。我們還完成了資本結構的轉型，將 A 系列股票轉換為普通股，將我們的市值增加到約 20 億美元，流動性增加了 5 倍。我們現在計劃在第三季度償還 2 億美元的債務。

We also announced product wins in 3 areas of differentiated technology that are positioning us to be on the target for our $1 billion revenue from ZEV technology, zero-emission vehicle technology, by 2030, higher -- at higher average selling price and the same or better margins compared to our current business. As we continue to win new business, we are seeing that in the areas of turbos and zero-emission vehicles, we are seeing the proof that our technology is needed by our customers.

我們還宣佈在3 個差異化技術領域取得產品勝利，這使我們能夠實現到2030 年從ZEV 技術、零排放汽車技術中獲得10 億美元收入的目標，更高——以更高的平均售價和相同或相同的價格與我們目前的業務相比，利潤率更高。隨著我們不斷贏得新業務，我們看到在渦輪增壓器和零排放車輛領域，我們看到了客戶需要我們的技術的證據。

With the success we have had so far this year, we are raising the 2023 full year outlook, as Sean stated, to the following midpoints of: net sales at $3.93 billion; adjusted EBITDA of $645 million; adjusted free cash flow of $390 million. I am extremely pleased with the strong quarter we had, and I want to thank the entire Garrett team for their hard work and dedication that has been instrumental in achieving our goals.

憑藉今年迄今為止所取得的成功，正如 Sean 所說，我們將 2023 年全年展望上調至以下中點：淨銷售額為 39.3 億美元；調整後 EBITDA 為 6.45 億美元；調整後自由現金流為 3.9 億美元。我對我們強勁的季度表現感到非常滿意，我要感謝整個蓋勒特團隊的辛勤工作和奉獻精神，他們為實現我們的目標發揮了重要作用。

Now I think we can turn to the Q&A session.

現在我想我們可以進入問答環節了。

(Operator Instructions) Our first question comes from Hamed Khorsand with BWS Financial.

（操作員說明）我們的第一個問題來自 BWS Financial 的 Hamed Khorsand。

The first question I had was, looking at your performance in Q2, which was great, but when you're looking at the guidance that you're providing, if I just look at it from a balance perspective, you're not really expecting much of a sequential increase in sales. So I'm just wondering what your expectations are on that front. Is it really just product mix because of gasoline that's resulting in sales not going up that much sequentially from here?

我的第一個問題是，看看你在第二季度的表現，這很棒，但是當你看到你提供的指導時，如果我只是從平衡的角度來看，你並沒有真正期望銷售額的連續增長。所以我只是想知道您在這方面的期望是什麼。難道真的只是因為汽油的產品組合導致銷量從這裡開始沒有那麼多增長嗎？

That's an excellent question. When you look at what we've said -- this is Olivier speaking. When you look at what we said at the beginning of the year, and especially when we reported on our Q1 performance, we've explained that a significant part of our performance in Q1, and I think I'm saying the same today, is due to faster ramp-up than anticipated on some of the key applications that we have won and that we are launching.

這是一個很好的問題。當你看看我們所說的話時——這是奧利維爾在講話。當你看看我們在年初所說的內容時，尤其是當我們報告第一季度業績時，我們已經解釋過，我們第一季度業績的一個重要部分，我想我今天也這麼說，是由於我們贏得的和正在啟動的一些關鍵應用程序的啟動速度比預期更快。

Obviously, I mean, the further you go into the year, the more our forecast is close to -- our initial forecast is close to what we had initially forecasted. So there is an element of that accelerated ramp-up that obviously doesn't continue to ramp up forever. And then I would say we are, like everyone, monitoring the situation of what's happening around the world for the second half.

顯然，我的意思是，進入今年越遠，我們的預測就越接近——我們最初的預測接近我們最初的預測。因此，加速增長的一個因素顯然不會永遠持續增長。然後我想說，我們和所有人一樣，正在監測下半年世界各地發生的情況。

Okay. And the product mix shift to gasoline, it's obviously going to result in EBITDA margin being lower than what you've previously reported in prior years. Is this a permanent change in your margin profile? Or how do you adjust it so you go back to that 17% EBITDA margin?

好的。產品組合轉向汽油，這顯然會導致 EBITDA 利潤率低於您之前幾年報告的水平。這是您的保證金狀況的永久性變化嗎？或者如何調整才能回到 17% 的 EBITDA 利潤率？

So I would say that you're seeing mix dynamics quarter-to-quarter, but this should not detract from our long-term margin target. And back, I believe, at spin, we had said we expected margins in a corridor of 17% to 19%, but that was under different macroeconomic circumstances. If you adjust for foreign exchange with the euro back closer to 1.20, which is where it was at the time, and you adjust for commodities down to pricing at that point in time, you see actually that we're in that corridor.

因此，我想說，您會看到季度與季度的混合動態，但這不應損害我們的長期利潤目標。我相信，在旋轉時，我們曾說過我們預計利潤率在 17% 至 19% 之間，但這是在不同的宏觀經濟環境下進行的。如果你對外匯進行調整，歐元回到接近 1.20（當時的水平），並且你對大宗商品進行調整，調整到當時的定價，你會發現我們實際上處於該走廊。

Additionally, there was a lot of concern that we would be able to win gasoline business, and we have, and we've taken share of demand. And we continue to have a win rate of greater than 50%. So long story short, Hamed, we don't see this affecting the margin profile on a medium- to long-term basis. Yes, it can affect, as we launch products, the margin profile quarter-to-quarter, but our gasoline business will be performing at the margins that we have said in the past.

此外，人們非常擔心我們能否贏得汽油業務，我們確實做到了，而且我們已經佔據了需求份額。我們的勝率繼續保持在 50% 以上。長話短說，哈米德，我們認為這不會影響中長期的利潤狀況。是的，當我們推出產品時，它可能會影響每個季度的利潤狀況，但我們的汽油業務將按照我們過去所說的利潤率表現。

Okay. And my other question was regarding zero emissions. You're winning a lot of deals here. Is that translating into any revenue or sales in this fiscal year? Or is this more of a '24 event?

好的。我的另一個問題是關於零排放。您在這裡贏得了很多交易。這是否會轉化為本財年的任何收入或銷售額？或者這更像是 '24 事件？

What we are saying is that we are winning a lot of early developments. As you may remember, in the automotive industry, you are usually on predevelopment. I mean I'm simplifying it for about 2, 3 years before you get into development and then you go to production. So I think it's back to what we said when we published our target of $1 billion by 2030.

我們所說的是，我們正在贏得許多早期開發。您可能還記得，在汽車行業，您通常處於預開發階段。我的意思是，在進入開發、然後投入生產之前，我會簡化它大約 2、3 年。所以我認為這又回到了我們在公佈 2030 年 10 億美元目標時所說的內容。

We are expecting a lot of these applications to launch between 2027 and 2030. Obviously, we are already having revenue, although still small, on fuel cell compressors because we are already selling in production on fuel cell compressors. And you will see a progressive boost on that. And then once we transform those very important predevelopment programs into production, obviously, it will reach revenue. So that's a little bit to be timed with the sequence of the way things are happening in our industry.

我們預計許多此類應用將在 2027 年至 2030 年間推出。顯然，我們已經在燃料電池壓縮機上獲得了收入，儘管仍然很小，因為我們已經在生產燃料電池壓縮機。你會看到這方面的進步。一旦我們將這些非常重要的預開發項目轉化為生產，顯然，它將實現收入。因此，這與我們行業中發生的事情的順序有點同步。

This concludes our question-and-answer session. I would like to turn the conference back over to Olivier for any closing remarks.

我們的問答環節到此結束。我想將會議轉回給奧利維爾發表閉幕詞。

Yes. So one more time, we had a fantastic quarter. I'm very proud of the results that we achieved. I'm very proud of the results that we are starting to see on all the 3 technologies that we've pushed to address the challenges that are brought by zero-emission vehicle. And I would say more to come. See you soon.

是的。所以，我們再一次度過了一個美妙的季度。我對我們取得的成果感到非常自豪。我對我們為應對零排放汽車帶來的挑戰而推動的所有 3 項技術所取得的成果感到非常自豪。我還會說更多。再見。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。