Garrett Motion Inc (GTX) 2023 Q4 法說會逐字稿

Good morning, everyone, and welcome to the Q4 and full year 2023 Garrett Motion earnings conference call. (Operator Instructions) Please also note, today's event is being recorded. At this time, I'd like to turn the floor over to Eric Birge, Head of Investor Relations. Please go ahead.

大家早安，歡迎參加 Garrett Motion 的第四季和 2023 年全年財報電話會議。（操作員說明）也請注意，今天的活動正在錄製中。現在，我想請投資者關係主管 Eric Birge 發言。請繼續。

Thank you, Jamie. Good morning, and welcome, everyone. Thank you for attending the Garrett Motion fourth quarter and full year 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 website at investors.garrettmotion.com. There, you will also find links to our SEC filings, along with other important information about our company.

謝謝你，傑米。早上好，歡迎大家。感謝您參加 Garrett Motion 第四季和全年業績電話會議。在開始之前，我想提一下，今天的簡報和收益發布可在 Garrett Motion 網站 Investors.garrettmotion.com 的 IR 部分取得。在那裡，您還可以找到我們向 SEC 提交的文件的鏈接，以及有關我們公司的其他重要資訊。

Turning to slide 2, we note that the presentation contains forward-looking statements within the meanings of the Securities and Exchange Act. We encourage you to read the risks contained within our filings and with the Securities and Exchange Commission, become aware of these risks and uncertainties in our business, and understand that forward-looking statements are only estimates of future performance and should be taken as such. The forward-looking statements represent management's expectations only as of today, and the company disclaims any obligation to update them.

轉向投影片 2，我們注意到該簡報包含《證券交易法》含義內的前瞻性陳述。我們鼓勵您閱讀我們的文件中以及向證券交易委員會提交的文件中包含的風險，了解我們業務中的這些風險和不確定性，並了解前瞻性陳述僅是對未來業績的估計，應如此對待。這些前瞻性陳述僅代表管理階層截至目前的預期，本公司不承擔任何更新這些前瞻性陳述的義務。

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're encouraged to examine these reconciliations in the appendix to the press release and the slide presentation.

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經營我們的業務。我們將這些指標與最直接可比較的 GAAP 指標進行了調節，我們鼓勵您在新聞稿和投影片簡報的附錄中檢查這些調節。

Also 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 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.

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」來指稱輕型車柴油和輕型車汽油產品。參加今天電話會議的有 Garrett 總裁兼執行長 Olivier Rabiller 和 Garrett 資深副總裁兼財務長 Sean Deason。我現在將電話轉交給奧利維爾。

Thanks, Eric, and thanks, everyone, for joining Garrett's fourth-quarter and full-year earnings conference call. I will begin today's remarks on slide 3. I am very pleased to report today that Garrett delivered a great performance in 2023, achieving full-year results above midpoint guidance across all financial metrics with record net sales of $3.9 billion and record adjusted EBITDA of $635 million. Our full-year adjusted free cash flow came in at the very robust $422 million at the conversion rate of 66% on full-year adjusted EBITDA. Our fourth-quarter financials contributed to the full-year results with net sales of $945 million, up 5% from the same period last year, and adjusted EBITDA of $145 million, and adjusted free cash flow of $137 million.

謝謝艾瑞克，也謝謝大家參加加勒特的第四季和全年財報電話會議。我將從幻燈片 3 開始今天的演講。我今天非常高興地向大家報告，蓋瑞特在2023 年取得了出色的業績，所有財務指標的全年業績均高於指導中點，淨銷售額創紀錄地達到39 億美元，調整後EBITDA 創紀錄地達到6.35 億美元。我們的全年調整後自由現金流達到非常強勁的 4.22 億美元，全年調整後 EBITDA 轉換率為 66%。我們第四季的財務狀況為全年業績做出了貢獻，淨銷售額為 9.45 億美元，較去年同期增長 5%，調整後 EBITDA 為 1.45 億美元，調整後自由現金流為 1.37 億美元。

I would like to thank the entire Garrett team for their contributions and dedication to our customers and operational excellence, which continues to enable us to perform in all economic cycles. Once again, our very strong cash flow generation in 2023 has allowed us to execute a thoughtful approach to capital allocation priorities. We simplified our capital structure to welcome new equity holders, strengthen our liquidity position and flexibility, and return value to our shareholders through our share repurchase program.

我要感謝整個蓋勒特團隊為我們的客戶做出的貢獻和奉獻以及卓越的運營，這使我們能夠在所有經濟週期中繼續保持良好的表現。我們在 2023 年產生的現金流非常強勁，這使我們能夠對資本配置優先事項採取深思熟慮的方法。我們簡化了資本結構，以歡迎新的股東，增強我們的流動性狀況和靈活性，並透過股票回購計畫向股東回報價值。

In 2023, we repurchased $213 million of common stock, in addition to the preferred stock redemptions, while investing more than half of our RD&E into zero emission technologies. We also meaningfully delevered by paying down $200 million of our term loan to bring our net leverage ratio under 2.2 times and finished the year with $829 million of liquidity.

2023 年，除了優先股贖回外，我們還回購了 2.13 億美元的普通股，同時將一半以上的研發和設計投資於零排放技術。我們也透過償還 2 億美元的定期貸款，有意義地去槓桿化，將我們的淨槓桿率降至 2.2 倍以下，並在年底實現了 8.29 億美元的流動性。

Garrett's continued exceptional financial performance and cash flow generation allows us to take a similar approach to capital allocation for 2024. I am pleased to announce that our Board has authorized a new $350-million share repurchase program.

Garrett 持續出色的財務表現和現金流產生使我們能夠在 2024 年採取類似的資本配置方法。我很高興地宣布，我們的董事會已批准一項新的 3.5 億美元的股票回購計畫。

From a macro perspective, we are anticipating the global industry to be flattish, with light vehicle production expected to be flat to down and commercial vehicle production expected to be flat to up. With these expectations, we have once again proactively implemented productivity and efficiency actions to achieve and sustain our financial performance through a flat-to-down economic cycle in 2024.

從宏觀角度來看，我們預計全球產業將持平，其中輕型汽車產量預計持平至下降，商用車產量預計將持平至上升。帶著這些期望，我們再次積極實施生產力和效率行動，以在 2024 年平穩至下降的經濟週期中實現並維持我們的財務表現。

This year, we will continue to increase our investments in zero emission technologies, supported by increasing momentum across all verticals for our differentiated technologies. We also expect to see close to $20 million revenue from our industry-leading, high-efficiency fuel cell compressor when, at the same time, we are continuing to see increasing demand for our turbo technologies.

今年，我們將繼續增加對零排放技術的投資，並在所有垂直領域中增強我們差異化技術的動力。我們也預計，我們領先業界的高效能燃料電池壓縮機將帶來接近 2,000 萬美元的收入，同時，我們的渦輪技術需求不斷成長。

Turning now to slide 4, as I just mentioned, the increasing momentum across all product verticals allows us to continue to strengthen our leadership position in turbo offerings and further develop our differentiated zero emission technology. Our turbo business, once again, achieved more than 50% win rate, and we won a series production award in several hybrid and alternative fuel application.

現在轉向幻燈片 4，正如我剛才提到的，所有垂直產品的成長勢頭使我們能夠繼續加強我們在渦輪增壓產品方面的領導地位，並進一步開發我們差異化的零排放技術。我們的渦輪增壓業務再次取得了超過 50% 的勝率，並在多個混合動力和替代燃料應用中獲得了系列生產獎。

In light vehicles, we won two additional high-volume electric compressor applications. And within commercial vehicle, we successfully launched our hydrogen ICE application, or H2ICE, with JCB for off-highway equipment. Our H2ICE applications are gaining heightened attention from our commercial vehicle customer as they progress towards their decarbonization targets.

在輕型車輛中，我們贏得了另外兩項大容量電動壓縮機應用。在商用車領域，我們與 JCB 成功推出了氫 ICE 應用（即 H2ICE），用於非公路設備。隨著我們的商用車客戶朝著脫碳目標邁進，我們的 H2ICE 應用程式受到了他們的高度關注。

This trend towards zero emission technology continue to drive increased interest and demand for our fuel cell compressor, E-Powertrain, and E-Cooling compressors. We have the broadest range of fuel cell compressors in the industry, and we achieved an additional series production award in Q4.

這種零排放技術的趨勢繼續推動人們對我們的燃料電池壓縮機、電子動力系統和電子冷卻壓縮機的興趣和需求的增加。我們擁有業界最廣泛的燃料電池壓縮機，並在第四季度獲得了額外的系列生產獎。

We have also added another pre-development award for our breakthrough high-speed and high-power density E-Powertrain. And finally, we added three more pre-development awards for our game-changing centrifugal E-Cooling compressor. These achievements are proof that our zero emission technologies address the evolving needs of our customers as they develop new generations of electrified vehicles.

我們還為我們突破性的高速和高功率密度電動動力系統增加了另一個預開發獎項。最後，我們為改變遊戲規則的離心電子冷卻壓縮機又增加了三個預開發獎項。這些成就證明我們的零排放技術可以滿足客戶在開發新一代電動車時不斷變化的需求。

Consistent with our last Investor Day presentation, we see still significant runway ahead as we progress towards our target of $1 billion of annual sales of zero emission products by 2030. I will now turn the call to Sean to provide more insights into our financial results and outlook for 2024.

與我們上次在投資者日的演講一致，我們認為，在實現 2030 年零排放產品年銷售額 10 億美元的目標方面，我們還有很長的路要走。我現在將致電 Sean，請他提供有關我們 2024 年財務業績和前景的更多見解。

Thanks, Olivier, and welcome, everyone. I will begin my remarks on slide 5. Starting with reported net sales, on the upper left-hand graph, you will see net sales for the last two years, with Q4 2023 at $945 million, up from Q4 of 2022 by 5% on a GAAP basis and up 3% on a constant currency basis. This increase was driven primarily by ramp-ups of small engine gasoline applications, partially offset by lower sales of commercial vehicles.

謝謝奧利維爾，歡迎大家。我將從幻燈片 5 開始我的演講。從報告的淨銷售額開始，在左上角的圖表中，您將看到過去兩年的淨銷售額，2023 年第四季為9.45 億美元，按GAAP 計算比2022 年第四季成長5%，以公認會計原則計算成長3%固定貨幣基礎。這一增長主要是由小型發動機汽油應用的增加所推動的，但部分被商用車銷量的下降所抵消。

Moving to the upper right-hand side of the page, the increased sales translated into higher adjusted EBITDA in the fourth quarter of $145 million, up 4% or $5 million from $140 million last year. This reflects our continued strong productivity and operational execution net of unfavorable product mix I mentioned earlier. As a result, the adjusted EBITDA margin was 15.3%, down from 15.6% last year.

轉到頁面右上角，銷售額的增加轉化為第四季度調整後 EBITDA 的提高，達到 1.45 億美元，比去年的 1.4 億美元增長 4%，即 500 萬美元。這反映了我們在我之前提到的不利產品組合的影響下仍然保持強勁的生產力和營運執行力。因此，調整後 EBITDA 利潤率為 15.3%，低於去年的 15.6%。

And on the bottom left graph, we show that Garrett generated positive adjusted free cash flow of $137 million in Q4 of 2023, up slightly from $132 million in Q4 of 2022. Compared to last year, this increase is driven by working capital efficiency due to stronger year-end collections, partially offset by higher tax, interest, and capital expenditures. We continue to see our adjusted free cash flow conversion to adjusted EBITDA trend above 60%, which is in line with our capital allocation framework.

在左下圖上，我們顯示 Garrett 在 2023 年第四季產生了 1.37 億美元的正向調整自由現金流，略高於 2022 年第四季的 1.32 億美元。與去年相比，這一成長是由年終收款增加帶來的營運資本效率所推動的，但部分被較高的稅收、利息和資本支出所抵銷。我們繼續看到調整後的自由現金流轉換為調整後的 EBITDA 趨勢高於 60%，這符合我們的資本配置框架。

Turning to slide 6, at the top of the page, we show our Q4 net sales bridge by product category as compared with the same period last year. As mentioned, Q4 net sales were up 5% on a GAAP basis and 3% on a constant currency basis, reflecting an increase of $47 million over Q4 of 2022.

轉向投影片 6，在頁面頂部，我們按產品類別顯示了與去年同期相比的第四季淨銷售額橋。如前所述，第四季淨銷售額按 GAAP 計算成長 5%，以固定匯率計算成長 3%，比 2022 年第四季增加 4,700 萬美元。

Gasoline products were up 11% at constant currency, adding $39 million in sales. And gasoline products now comprise 45% of reported net sales, up 42% from last year, driven primarily by small engine product ramp-ups in China and North America. Diesel products increased 5% at constant currency, primarily from higher production volumes on existing platforms in Europe, an increase of $12 million to sales and comprising 25% of total sales, flat from last year.

以固定匯率計算，汽油產品成長了 11%，銷售額增加了 3,900 萬美元。汽油產品目前佔報告淨銷售額的 45%，比去年增長 42%，這主要是由中國和北美小型引擎產品的成長所推動的。以固定匯率計算，柴油產品成長了 5%，主要是由於歐洲現有平台產量增加，銷售額增加了 1,200 萬美元，佔總銷售額的 25%，與去年持平。

Commercial vehicle sales decreased 16% at constant currency or $27 million, driven by industry weakness as a high interest rate environment and softness in the construction and real estate markets continued to pressure growth. Commercial vehicle products represented 16% of total net sales in Q4 of 2023, down from 19% in Q4 of 2022.

商用車銷售量以固定匯率計算下降 16%，即 2,700 萬美元，這是由於高利率環境以及建築和房地產市場疲軟繼續給成長帶來壓力，導致行業疲軟。商用車產品佔 2023 年第四季總淨銷售量的 16%，低於 2022 年第四季的 19%。

And our aftermarket business decreased 2% at constant currency or $2 million. It comprises 12% of net sales, down from 13% in Q4 2022. And finally, we saw a favorable impact of $19 million due to foreign exchange on a year-over-year basis.

我們的售後業務以固定匯率計算下降了 2%，即 200 萬美元。它佔淨銷售額的 12%，低於 2022 年第四季的 13%。最後，我們看到了外匯帶來的同比 1900 萬美元的有利影響。

Moving now to the bottom of the page, we show our full-year net sales bridge by product category as compared with last year. Net sales were up 8% on both a GAAP basis and constant currency basis, reflecting an increase of $283 million over the full year 2022, allowing us to achieve record net sales this year of $3.9 billion, as Olivier mentioned.

現在轉到頁面底部，我們按產品類別顯示與去年相比的全年淨銷售額橋。正如 Olivier 所提到的，按照 GAAP 基礎和固定匯率計算，淨銷售額增長了 8%，比 2022 年全年增加了 2.83 億美元，使我們今年的淨銷售額達到了創紀錄的 39 億美元。

Gasoline products were up 17% at constant currency, adding $255 million in sales. Gasoline now comprises 44% of reported net sales, up from 41% last year, driven by light vehicle industry recovery and product ramp-ups, primarily in China and Europe.

以固定匯率計算，汽油產品成長了 17%，銷售額增加了 2.55 億美元。在輕型汽車產業復甦和產品產量增加（主要在中國和歐洲）的推動下，汽油目前佔報告淨銷售額的 44%，高於去年的 41%。

Diesel products increased 3% at constant currency, an increase of $33 million to sales and comprised 25% of total sales, down slightly from 26% last year. And commercial vehicle sales declined 1% at constant currency, a decrease of $10 million to sales, again, driven by a high interest rate environment and softness in the construction and real estate markets, primarily in the second half of the year.

以固定匯率計算，柴油產品成長了 3%，銷售額增加了 3,300 萬美元，佔總銷售額的 25%，略低於去年的 26%。以固定匯率計算，商用車銷售額下降了 1%，銷售額減少了 1000 萬美元，這再次受到高利率環境以及建築和房地產市場疲軟（主要是在今年下半年）的推動。

Commercial vehicles represented 17% of total net sales in 2023, down from 19% in 2022. Our aftermarket business increased 3% at constant currency, an increase of $12 million. It comprises 12% of net sales flat to 2022. And finally, on a full year basis, we saw an unfavorable impact of $14 million due to foreign exchange.

2023 年商用車佔總淨銷售量的 17%，低於 2022 年的 19%。以固定匯率計算，我們的售後市場業務成長了 3%，即增加了 1,200 萬美元。到 2022 年，它佔淨銷售額的 12%。最後，就全年而言，我們看到外匯造成的不利影響為 1,400 萬美元。

Turning now to slide 7, at the top of the page, we show our Q4 adjusted EBITDA bridge compared with the same period last year. In Q4, we delivered an adjusted EBITDA of $145 million, representing a $5-million improvement over the same period last year.

現在轉到頁面頂部的幻燈片 7，我們顯示了與去年同期相比第四季度調整後的 EBITDA 橋。第四季度，我們的調整後 EBITDA 為 1.45 億美元，比去年同期增加了 500 萬美元。

Increased volumes, driven mainly from gasoline, were offset by weaker commercial vehicle volumes, resulting in a net product mix headwind, as previously mentioned, impacting adjusted EBITDA by $33 million. Overall, operating performance was a net positive of $24 million, as we continue to successfully pass through inflation and generate productivity, while dedicating over 50% of the total R&D expenditures to zero emission technologies.

主要由汽油推動的銷售成長被商用車銷售疲軟所抵消，導致淨產品組合逆風，如前所述，影響調整後 EBITDA 3,300 萬美元。總體而言，我們的營運業績淨值為 2,400 萬美元，因為我們繼續成功地度過了通貨膨脹並提高了生產力，同時將總研發支出的 50% 以上用於零排放技術。

Moving to the bottom of the page, we have our full year adjusted EBITDA bridge compared with 2022. This year, we delivered record adjusted EBITDA of $635 million, which was above our midpoint outlook of $630 million. This represented a $65-million improvement over the prior year. Our full year adjusted EBITDA margin also came in 10 basis points better than our midpoint outlook at 16.3%, in line with our financial framework.

轉到頁面底部，我們看到了與 2022 年相比的全年調整後 EBITDA 橋。今年，我們實現了創紀錄的調整後 EBITDA 6.35 億美元，高於我們 6.3 億美元的中位數預期。這比前一年增加了 6500 萬美元。我們的全年調整後 EBITDA 利潤率也比我們的中點預期高出 10 個基點，為 16.3%，這與我們的財務框架一致。

Strong growth in volumes in the first half of the year contributed $89 million and was partially offset by $79 million of unfavorable product mix impact, as strong double-digit growth in small engine gasoline applications was partially offset by weaker commercial vehicle volumes. Our overall operating performance was a net positive of $55 million, and we consistently delivered productivity throughout 2023 and pass through inflation, all of this while growing our spend on zero emission technology development by $14 million versus the prior year.

上半年銷售的強勁成長貢獻了 8,900 萬美元，但被不利的產品組合影響 7,900 萬美元部分抵消，因為小型引擎汽油應用強勁的兩位數成長被商用車銷售疲軟部分抵消。我們的整體營運表現為淨正值5,500 萬美元，我們在2023 年始終如一地提高了生產力並克服了通貨膨脹，所有這些同時我們在零排放技術開發方面的支出比上一年增加了1,400 萬美元。

Moving now to slide 8, we show the adjusted EBITDA to adjusted free cash flow bridge for 2023. Garrett delivered a record adjusted free cash flow of $422 million for a very healthy adjusted free cash flow conversion of 66% of adjusted EBITDA. This performance was driven by higher earnings that we once again converted into cash, as well as an improvement in working capital of $23 million, primarily due to improvements in inventory and payables.

現在轉到投影片 8，我們顯示了 2023 年調整後的 EBITDA 與調整後的自由現金流橋。加勒特的調整後自由現金流達到創紀錄的 4.22 億美元，調整後自由現金流轉換率為調整後 EBITDA 的 66%，非常健康。這一業績的推動因素是收益增加，我們再次將其轉化為現金，以及營運資金增加 2,300 萬美元，這主要是由於庫存和應付帳款的改善。

Capital expenditures and cash taxes were in line with expectations, and cash interest increased to $89 million due to the issuance of our $700 million term loan B used to facilitate the normalization of our capital structure earlier in the year.

資本支出和現金稅符合預期，由於今年稍早發放了 7 億美元定期貸款 B，用於促進我們資本結構的正常化，現金利息增加至 8,900 萬美元。

Turning now to slide 9, we ended 2023 with a strong liquidity position of $829 million, up $108 million versus 2022. This was comprised of $570 million of capacity on our undrawn revolving credit facility and $259 million of unrestricted cash.

現在轉向投影片 9，截至 2023 年，我們的流動性部位強勁，為 8.29 億美元，比 2022 年增加了 1.08 億美元。其中包括 5.7 億美元的未提取循環信貸額度和 2.59 億美元的無限制現金。

We finished 2023 with a net leverage ratio under 2.2 times, ahead of our expectations and driven by strong cash generation for the year, coupled with $200 million of delevering in the second half. The normalization of our capital structure, delevering, and Garrett's strong and consistent cash generation also resulted in a ratings upgrade from S&P to BB- with a stable outlook in Q3.

2023 年結束時，我們的淨槓桿率低於 2.2 倍，超出了我們的預期，這得益於當年強勁的現金產生能力以及下半年 2 億美元的去槓桿化。我們的資本結構正常化、去槓桿化以及蓋瑞特強勁且持續的現金產生能力也導致標準普爾評級從標準普爾升級至 BB-，第三季度展望穩定。

During the quarter, we repurchased $35 million of common stock, for a total of $213 million repurchased during 2023, close to 10% of our market capitalization as we continue to use our earnings and cash generation to return value to our shareholders. As Olivier mentioned earlier, our Board has authorized a new share repurchase program of $350 million for 2024. Our consistent and robust cash generation and capital-light financial framework enables us to return significant value to our shareholders and maintain a healthy balance sheet. Our current level of adjusted free cash flow is close to 20% of our market capitalization, and we think that a share repurchase program is a good use of cash given current financial market conditions.

本季度，我們回購了 3,500 萬美元的普通股，2023 年回購總額為 2.13 億美元，接近我們市值的 10%，因為我們將繼續利用盈利和現金生成為股東回報價值。正如奧利維爾先前所提到的，我們的董事會已批准 2024 年 3.5 億美元的新股票回購計畫。我們始終如一、穩健的現金產生和輕資本財務框架使我們能夠向股東回報可觀的價值並保持健康的資產負債表。我們目前的調整後自由現金流水準接近我們市值的 20%，我們認為，考慮到當前的金融市場狀況，股票回購計畫是對現金的良好利用。

Moving to slide 10, on this slide, you can see the assumptions we used in planning our 2024 outlook and financial ranges that imply the following midpoints: net sales of $3.9 billion; net sales growth, flat at constant currency; net income of $253 million; adjusted EBITDA of $620 million, implying a margin of 16%; net cash provided by operating activities of $475 million; and adjusted free cash flow of $375 million. Our robust new business win rate of greater than 50% on average over the past 5 years is driving share of demand gains. This, when coupled with increasing turbo penetration on internal combustion engines, allows us to offset both an increase in average BEV penetration of 3% as well as a decrease in light vehicle production compared to the prior year.

前往投影片 10，在這張投影片上，您可以看到我們在規劃 2024 年前景和財務範圍時所使用的假設，這些假設意味著以下中點：淨銷售額 39 億美元；淨銷售額成長，以固定匯率計算持平；淨利2.53億美元；調整後 EBITDA 為 6.2 億美元，意味著利潤率為 16%；經營活動提供的現金淨額為4.75億美元；調整後自由現金流為 3.75 億美元。過去 5 年，我們平均超過 50% 的強勁新業務贏得率推動了需求份額的成長。再加上內燃機渦輪增壓普及率的提高，我們能夠抵消純電動車平均普及率 3% 的成長以及輕型汽車產量較上年下降的影響。

In this flattish revenue environment, we plan to deliver productivity and pass through inflation to offset mix and inflationary headwinds in 2024. At the same time, increasing customer interest across key regions and verticals for our zero emission products drives us to responsibly increase our research, development, and engineering spend to 4.5% of sales, up 30 basis points from 2023. And we expect to dedicate roughly 60% of our research, development and engineering spending in 2024 to zero emission technologies. And with that, I will now turn the call back to Olivier to wrap up.

在收入持平的環境下，我們計劃在 2024 年提高生產力並透過通膨來抵消組合和通膨阻力。同時，關鍵地區和垂直行業的客戶對我們的零排放產品的興趣不斷增加，促使我們負責任地將我們的研究、開發和工程支出增加到銷售額的4.5%，比2023 年增加30 個基點。我們預計到 2024 年將約 60% 的研究、開發和工程支出用於零排放技術。現在，我將把電話轉回給奧利維爾結束。

Thanks, Sean. Turning to slide 11, it was a great year, and once again, we delivered strong financials in a challenging macro environment. We continue to strengthen our leadership position in turbo, once again winning greater than 50% of the available business in 2023. Additionally, interest in our zero emission technologies and applications continues to intensify, with new series production and pre-production contract -- pre-development contracts awarded in Q4 across multiple regions and customers.

謝謝，肖恩。轉向幻燈片 11，這是偉大的一年，我們再次在充滿挑戰的宏觀環境中實現了強勁的財務表現。我們繼續加強在渦輪增壓領域的領導地位，到 2023 年再次贏得超過 50% 的可用業務。此外，隨著第四季度多個地區和客戶授予新的系列生產和預生產合同——預開發合同，人們對我們的零排放技術和應用的興趣持續增強。

We expect to maintain our strong financial performance once again in 2024 in a flat-to-down industry and have taken decisive productivity actions to control fixed costs and to adapt our highly variable cost structure to this environment. We also plan to return value to our shareholders through our new $350-million share repurchase program, supported by Garrett's ability to constantly generate strong cash flow even in tough times. Thank you for your time and, operator, we are now ready for the Q&A session.

我們預計到 2024 年，在持平至下降的行業中再次保持強勁的財務業績，並採取果斷的生產力行動來控制固定成本，並使我們高度可變的成本結構適應這種環境。我們還計劃透過新的 3.5 億美元股票回購計畫向股東回報價值，Garrett 即使在困難時期也能持續產生強勁的現金流。感謝您抽出寶貴的時間，接線員，我們現在已準備好進行問答環節。

(Operator Instructions) Hamed Khorsand, BWS Financial.

（操作員指令）Hamed Khorsand，BWS Financial。

Hi, good morning. Good afternoon as well. First off, could you just talk about the environment that you're going into? You talked about being flattish. Are you taking market share right now, what your expectations are there? And do you feel like there's any sort of inventory stocking or destocking happening that's also being reflected in your guidance?

早安.也下午好。首先，您能談談您即將進入的環境嗎？你談到扁平化。您現在正在佔據市場份額嗎？您的期望是什麼？您是否認為存在任何形式的庫存庫存或去庫存情況也反映在您的指導中？

So, Hamed, that's a very good question. Obviously, let me unpack a little bit what we mean by flattish to down. When we say flattish to down, we are referring to the light vehicle production worldwide. And I think we are very consistent in our forecast with the consultants and from what I've seen from our peers reporting for the last few weeks, we are very consistent as well.

所以，哈米德，這是一個非常好的問題。顯然，讓我稍微解釋一下從平坦到向下的含義。當我們說持平或下降時，我們指的是全球輕型車產量。我認為我們與顧問的預測非常一致，而且從我從過去幾週的同儕報告中看到的情況來看，我們也非常一致。

In that environment, we are planning to have increased turbo penetration and increased share of demand, which, at the end, is the reason why we are maintaining our revenue flat despite a forecasted growth of battery electric vehicle that is about 300 basis points, which also is very consistent with everyone into the industry since we have not seen yet into the predictions, the impact of the so-called slowdown of battery electric vehicle. So we are planning for 15% battery electric vehicle. Some people may say it's a bit aggressive at 15% or conservative depending on the way you -- where you place yourself in the short term. But we'd rather plan like everyone for the timing and the results of all that.

在這種環境下，我們計劃提高渦輪增壓滲透率並增加需求份額，這就是為什麼我們保持收入持平的原因，儘管電池電動車的預測增長約為 300 個基點，這也與大家進入行業非常一致，因為我們還沒有看到進入預測，所謂的電池電動車放緩的影響。所以我們正在規劃 15% 的純電動車。有些人可能會說 15% 有點激進或保守，這取決於你在短期內對自己的定位。但我們寧願像每個人一樣計劃所有這一切的時間和結果。

Despite that expected growth on BEVs, we are winning our share of the business that's growing. Yes, we are getting the share of demand gains.

儘管純電動車預計會出現成長，但我們正在贏得不斷增長的業務份額。是的，我們正在分享需求成長的份額。

Okay, great. And then as far as the battery electric goes, what is Garrett's timing as to being able to generate revenue from there? I know you've been talking about a lot more in recent quarters.

好的，太好了。那麼就電池電力而言，加勒特能夠從中產生收入的時機是什麼？我知道你最近幾季談論了很多事情。

We have a -- I think we have explained several times that we are planning to get to $1 billion revenue on zero emission technology by 2030, which comprises of three technologies. The first one is on fuel cell compressors, so it's for hydrogen fuel cell vehicle. It's not for battery electric vehicle, but these are zero emission solutions as well. This is a business where we are already recording revenue. I think we've said that today that we are expecting about $20 million of revenue already on fuel cell compressors in 2024.

我想我們已經多次解釋過，我們計劃在 2030 年在零排放技術上實現 10 億美元的收入，其中包括三項技術。第一個是燃料電池壓縮機，所以它是用於氫燃料電池汽車的。它不適用於電池電動車，但這些也是零排放解決方案。我們已經在這項業務中記錄收入。我想我們今天已經說過，預計 2024 年燃料電池壓縮機的收入將達到約 2000 萬美元。

The second technology is the high-speed electric motors, coupled with a gearbox and inverter, which is the technology that is specific to us and unique to us with high-power density, where we have recorded already a number of pre-development contracts, and obviously, there is a significant portion of that $1 billion outlook that is coming from that technology. And the last one is E-compressors. The idea is to use centrifugal electric, high-speed electric compressor technology that, once again, is unique to us to provide a step change to our customers in terms of power and power density when it comes to the huge needs of coolings that you have for battery electric vehicle.

第二項技術是高速電動機，加上變速箱和逆變器，這是我們特有的技術，也是我們獨有的高功率密度技術，我們已經記錄了一些預開發合同，顯然，這10 億美元的前景中有很大一部分來自該技術。最後一種是電動壓縮機。我們的想法是使用離心電動高速電動壓縮機技術，這對我們來說是獨一無二的，當涉及到您對冷卻的巨大需求時，為我們的客戶提供功率和功率密度方面的階躍變化用於純電動汽車。

So that technology, once again, will be applicable to a battery electric vehicle. And this is a technology where we have recorded, again, three more pre-development contracts during Q4. So more to come. Today, what we say is that we are confirming the trajectory that we had highlighted in October during our Investor Day.

因此，該技術將再次適用於電池電動車。在這項技術上，我們在第四季再次記錄了三份預開發合約。未來還會有更多。今天，我們要說的是，我們正在確認我們在 10 月投資者日期間強調的軌跡。

Okay, and one last question is what's the plan or allocation for free cash flows here? Is it going to be the same, more about stock buyback versus that, or any plans to reduce debt this year?

好的，最後一個問題是自由現金流的計畫或分配是什麼？會是一樣的，更多的是股票回購，還是今年有任何減少債務的計畫？

Yeah, Hamed, we take a balanced approach to capital allocation. And as we stated before, first and foremost, we fund the business, which you see we're doing for our guide. And then second, we were looking to do a mix of deleveraging and share buyback, but that's subject to how the market develops and the year develops. But as you can see, we've got very good optionality and very robust cash flow generation, so we have the ability to do both.

是的，哈米德，我們對資本配置採取平衡的方法。正如我們之前所說，首先也是最重要的是，我們為業務提供資金，您可以看到我們正在為我們的指南做這件事。其次，我們希望將去槓桿化和股票回購結合起來，但這取決於市場的發展和年份的發展。但正如你所看到的，我們擁有非常好的選擇權和非常強大的現金流生成，因此我們有能力做到這兩點。

Okay, great. Thank you.

好的，太好了。謝謝。

Michael Ward, Freedom capital.

麥可·沃德，自由之都。

Thank you. Good morning, everyone. I just wonder if you could talk a little bit about your ability to adjust to shifting market trends. And also, as we look in the markets, hybrids are a bigger percentage of the European market. And -- how is the turbo content in Europe versus the US and then what impact does it have if you start to see an increased shift in the US towards hybrids away from the strict ICE engines?

謝謝。大家，早安。我只是想知道您是否可以談談您適應不斷變化的市場趨勢的能力。而且，正如我們在市場中觀察到的那樣，混合動力車在歐洲市場中所佔的比例更大。而且，歐洲與美國的渦輪含量如何？如果您開始看到美國越來越多地從嚴格的內燃機轉向混合動力，那麼會產生什麼影響？

So Michael, that's a very good question. What we see in Europe is that the turbo penetration of that you have on hybrids is higher than the turbo penetration that we have on non-hybrid vehicle. So you would expect the same to happen in the US. If there is no hybrid, obviously, in the short term, that should come at the expense to some level of BEV. So maybe that's an opportunity on that side. And at the same time, that's an opportunity for us for an increased turbo penetration.

邁克爾，這是一個非常好的問題。我們在歐洲看到的是，混合動力車的渦輪滲透率高於非混合動力車的渦輪滲透率。所以你會期望美國也會發生同樣的情況。如果沒有混合動力車，顯然，在短期內，這應該以犧牲一定程度的純電動車為代價。所以也許這就是這方面的機會。同時，這對我們來說是一個提高渦輪滲透率的機會。

But more than the increased turbo penetration, it's also the increased level of technology that you have for the turbo on hybrid application, which tends to be higher than what you have on non-hybrid application as well. So it's higher turbo penetration and more technology.

但不僅僅是渦輪滲透率的提高，混合動力應用中渦輪的技術水平也有所提高，這往往比非混合動力應用中的技術水平更高。所以它具有更高的渦輪滲透率和更多的技術。

When you look at the technology, what type of impact does that have on content? Is it a 20% to 30%- increase in content per unit?

當您審視這項技術時，它會對內容產生哪種類型的影響？每單位含量是否增加 20% 到 30%？

I think we published, by the way, recently, the content per vehicle that we have on the different technologies, so we can refer to that. Again, if we move to a variable-geometry turbocharger, we are obviously increasing the content by your percentage. And then if we move to electric turbocharging or electric boosting, there is another increase that can even double the price of the turbocharging system.

順便說一句，我想我們最近發布了針對不同技術的每輛車的內容，因此我們可以參考。同樣，如果我們轉向可變幾何渦輪增壓器，我們顯然會按您的百分比增加含量。然後，如果我們轉向電動渦輪增壓或電動增壓，則還有另一種增加，甚至可以使渦輪增壓系統的價格翻倍。

Wow, okay. And just as far as turbo penetration, I see good data on the US market on where we are with turbos, and it's by 42%. How does that compare in Europe? And in Europe, you have a higher hybrid concentration, smaller vehicles, obviously driven by the higher gas prices in Europe relative to the US. Do you have a kind of a turbo penetration number for the European market and what it looks like relative to North America?

哇，好吧。就渦輪機普及率而言，我看到美國市場上渦輪機普及率的良好數據，達到了 42%。與歐洲相比如何？在歐洲，混合動力車的集中度更高，車輛更小，這顯然是由歐洲相對於美國更高的汽油價格推動的。您是否有歐洲市場的渦輪滲透率數據以及相對於北美的情況？

In Europe, we are between 85% and 90%.

在歐洲，我們的比例在 85% 到 90% 之間。

Wow, okay. It looks like if we (multiple speakers) --

哇，好吧。看起來如果我們（多位發言者）——

If I may, if you look at the three regions that we are selling between -- just to make a stop gap between Europe, China, and the US, the US are lagging behind the two other regions. So the potential in the US is huge.

如果可以的話，如果你看看我們銷售的三個地區——只是為了在歐洲、中國和美國之間做一個權宜之計，美國落後於其他兩個地區。所以美國的潛力是巨大的。

Okay. And then in addition, you get the increase -- if you go to hybrids and presumably higher tech, so you get growth and then additional content. So I'm looking at the right things.

好的。此外，如果你採用混合動力和可能更高的技術，你就會得到成長，這樣你就會得到成長，然後獲得額外的內容。所以我正在尋找正確的事情。

Yeah.

是的。

Yes, you're looking at it. Absolutely.

是的，你正在看它。絕對地。

Thanks very much.

非常感謝。

(Operator Instructions) Ladies and gentlemen, it's showing no additional questions. I'd like to turn the floor back over to Eric Birge for any closing remarks.

（操作員說明）女士們先生們，它沒有顯示任何其他問題。我想請艾瑞克‧伯奇 (Eric Birge) 發表結束語。

I want to thank everybody for the time you spent today reviewing our 2023 results and our outlook for 2024, and please contact me directly if you have any further questions. Thank you.

我要感謝大家今天花時間審查我們 2023 年的業績和 2024 年的展望，如果您有任何其他問題，請直接與我聯繫。謝謝。

And ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.

女士們、先生們，我們今天的電話會議和演示就到此結束。我們感謝您的加入。現在您可以斷開線路。