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Mar 31, 2022
Garrett Motion Q1 2022 Earnings Report
Garrett Motion's financial performance declined due to volume decreases, inflation, and unfavorable foreign exchange impacts, but was partially offset by increased productivity and a favorable mix.
Key Takeaways
Garrett Motion reported a decrease in net sales by 10% to $901 million, with a net income of $88 million. The adjusted EBITDA was $146 million, and adjusted free cash flow was $38 million. The company updated its 2022 outlook to adjust for reduced volume expectations and lower Euro to Dollar exchange rates.
Net sales totaled $901 million, down 10% on a GAAP basis and down 6% at constant currency.
Net income totaled $88 million; Net income margin 9.8%.
Adjusted EBITDA totaled $146 million; Adjusted EBITDA margin 16.2%.
Adjusted free cash flow totaled $38 million.
Forward Guidance
Garrett provided its full year 2022 outlook, including expectations for flat global light vehicle auto production versus 2021, an exchange rate of 1.08 EUR to 1.00 USD, and maintaining its commitment to increased R&D investment in new technologies of approximately $18 million for the full year 2022.
Positive Outlook
- Net sales between $3.5 billion to $3.7 billion
- Net sales growth at constant currency between 1% to 6%
- Net income between $250 million to $295 million
- Adjusted EBITDA between $530 million to $590 million
- Net cash provided by operating activities between $405 million to $505 million
Challenges Ahead
- Global light vehicle auto production flat versus 2021 (down from 7% growth) due to continued semiconductor shortages and zero-COVID policy in China
- Exchange rate of 1.08 EUR to 1.00 USD, as compared with the prior outlook exchange rate assumption of 1.13 EUR to 1.00 USD
- Lowered 2022 outlook to adjust for slightly reduced volume expectations
Historical Earnings Impact
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Avg. Return Before/After Earnings
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