Loading...
Docoh

BorgWarner (BWA)

Participants
Patrick Nolan VP, IR
Frederic Lissalde President, CEO & Director
Kevin Nowlan EVP & CFO
John Murphy Bank of America Merrill Lynch
James Picariello KeyBanc Capital Markets
Dan Levy Crédit Suisse
Noah Kaye Oppenheimer
John Saager Evercore ISI
Brian Johnson Barclays Bank
David Kelley Jefferies
Joseph Spak RBC Capital Markets
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

Good morning. My name is Jerome, and I will be your conference facilitator. At this time, I would like to welcome everyone to the BorgWarner 2020 Third Quarter Results Conference Call. [Operator Instructions]. I would now like to turn the call over to Patrick Nolan, Vice President of Investor Relations. Mr. your begin may you conference. Nolan,

Patrick Nolan

our between and Thank Investor for regard see this conferences the homepage of Investor and With Events Relations everyone. our attending Investor on to for you morning, us you, calendar, morning. and earnings today. Relations our posted list. our earlier section Jerome, joining we release We Thank earnings on good issued on homepage. our borgwarner.com, a website, It's homepage be next will Relations multiple now Please full release. our our

I during as begin, statements, detailed may we which had call, forward-looking XX-K. our Before to inform that make uncertainties in this you involves and risks we

may the significantly from results matters actual differ today. Our discussed

When excluding impact order business the us organic, a the that you comparable today's and FX, and of that how net means means say for us picture performed hear M&A impact M&A. noncomparable to a provide prior During net of will us FX measures we excluding the presentation, periods. items. core clearer excluding hear When basis, purposes you highlight comparison with that adjusted, certain say at When say you in hear of means non-GAAP noncomparable items. other

exposure. compared We the say geographic When market, weighted will change production to that in our also refer you to our growth for means market. our hear us light vehicle

call discussion. that Fred. we've our earnings With our you to is organic of the with follow encourage these an our revenue Please to as the posted happy Our I'm to slides note defined presentation versus IR We turn outgrowth to change call that, over website. page the during along market.

Frederic Lissalde

and everyone. Pat, you, morning, good Thank

steadily today an exceeded our and throughout expectation. starting are improved North China results company share rates America the The X. for to update, We industry as quarter in and production pleased volumes provide QX on Slide our overall very

X% in by outgrowth saw relative up sales, down Importantly, X%. We driven With we compares quarter. to DCT a billion market the $X.X outgrowth significant business. being a approximately about commercial a we vehicle and continued organically, we continued in and to were about basis. means saw China, in outperform this This on

in also by new mix. and America, programs beneficial outperformed We driven North

margin very our exceeded incremental expectations, revenue performance wage we restructuring temporary as from strong our and Our was savings trends benefited and reductions.

positive Delphi one We product the as Technologies of flow. close delivered leadership. excited also the We're completed acquisition significant on capitalize quarter. free the and shortly our we after cash move of to And forward company

production. perspectives to Let's global now industry our you the see turn Slide can on X, where

industry during the that It's disruptions on future see As the chart first COVID-XX. half environment that still market backdrop the of with you is environment can slide, the the second we risk the volatile, has important from to by half. experienced improved the in arising significantly the from note

year have the As important overall, Europe full has latest monitoring night, these the in we're improved. that of in a you've lockdowns With expectations announcement the our potential full disruptions year for announced elevated, production very closely. seen last situation on industry level basis, the mind, caveats risk and

range We be our expect minus to to expectation the prior the market a decline. to XX% compared decline XX.X% XX% minus XX% in of to

stronger, And the planning the Europe decline. down is outlook XX% expect expect to by to On still XX% XX% America, for XX% we're this decline X% the but at full a be for to year. range. X% we basis, to we China Looking region, in North for a in relative

mid-single-digit a expect the low QX. As you we line see to chart, in decline from

production customers the volatility. to As with of we manage continue dialogue will XXXX, very our suppliers and any we to manage balance a active maintain our both

new business Let's awards. now discuss some

in XXXX. X, a major happy European Slide award eTurbo second on I'm launching our First, to OEM with announce,

for in controller case, our key motor the benefits Our eTurbo an hybrid association the delivering in The electronic in-house application. is state-of-the-art an partners, and efficient the was of this of us especially turbo, for crucial solution mechanical, win. capable to

announced latest I like premium on power in OEM great September with Next, win was electric next-generation XXXX summarize partnering battery launch XXX-volt This to business a carbide win is Slide vehicle. that for would X. We're to European our silicon supply in inverter our their will another in inverter and electronics.

like our on post-closing, about after our we've electrification Delphi And build offerings of customers engaging more would had inverter electric a expanded as planned to our a upon excited win We X. looking the a carbide vehicle and detail to efficiency and reduction. this you running of for XX% give with the future position on product the I excited supplier Slide architecture, transaction. significantly the of battery silicon that through with closing little improves leading ground XXX-volt vehicles. XXX-volt We're charging enabling, momentum range, hit to customer been time electrification underway. meetings whilst BorgWarner we're Our to inverters engagement report currently the forward on customer

We have of X with XX% customers plans representing global the volume industry meet next months. over to the

positioned pursuing over system to component of a just the months. that secure XX opportunities believe these and the to with be award we are customers. our next XX both expected sampling the of share pursue. will right We We activity on are the very industry programs we to full The charts well expect

better-than-expected summarize Before outlook it the third by turn third me driven XX. business new a to in achieved and quarter, Slide Kevin, on over let results outgrowth our quarter in We China. our I

cash has the industry solid. year-to-date Our Despite margin performance challenges we XXXX, -- challenging throughout free strong been delivered flow.

that position over proud to to and year a I support the positioning future I'm With their the our like the forward, our electrification. towards and Wins, teams. our industry helps XXXX, on shift and that, while to will turn continued inverter XXX-volt It look silicon the I like of eTurbo, our carbide only people industry. continuing evolution. look us Kevin. am through efforts manage about I profound As as secure to capitalize accelerated in allow excited very the we is

Kevin Nowlan

good Fred, you, Thank and everyone. morning,

Given details. right of to going get through the morning, financial to I'm we into number the topics have this dive

Slide XX. to turn let's So

revenue walk look at year that for foreign by currencies a from we stronger our increased As can revenue you modestly see ago. about QX, X.X% year-over-year

quarter. demand our CV vehicle largely other our outperformed a we driven X% the flat this up From relatively declines biggest XX%. although and Excluding by overweight China market in sizable organic in SUVs commercial In to and good regions. offset mix perspective, DCT market we by That decline by weighted sales mix America, delivered North of a impact, roughly position slightly points programs. vehicle market China contributor commercial strong new the by Strong outgrowth in in quarter. the XX% the business to X%, organic production. our was continues in also outgrowth average our the about well down revenue Europe, outperformed, was China, in our compared the market news But light In was of approximately in to trucks basis pickup X% decline ability for were to almost bode And of X%. vehicle outperformed we XXX outgrowth the means region. deliver the compared in approximately the

for since the outperforming discussed quarters, Europe light quarter year. diesel in As last third of been we've vehicle we've several

market will quarter of bit delivered become this lap Nonetheless, start to with outgrowth. headwind again. which this headwind, a a meaningful that of another outperformance, to started even now we've simply However, means diesel we

Slide flow cash at earnings Now performance, XX. and found our can which look be let's on

earnings comparable of earnings rate earlier restructuring in year. will than was wage quarter performance On this the revenue operating XXXX. our income adjusted driven in to $XX due XXXX. rate a million certain the basis, quarter, per higher by reductions of $XXX change to tax the year implemented credits to foreign the by future a the increased lower operating sales. we in announced was our XX.X% benefit quarter, for quarter quarter in $XX was This the million share which recovery of of $X.XX the ability a third to utilize was compared regulation the to was third our higher convert Our ability temporary tax higher adjusted actions driven offset yielded in obligations. on This The to the which adjusted ago and successfully tax million operating third the limit of U.S. XX.X%, quarter million tax a of at which was tax on Adjusted end the compared income $XXX an year. of margin up some

into Moving flow flow. cash the we We're that to during the cash income we flow. demonstrated free of Fundamentally, cash generated proud fact to $XXX operating positive convert of quarter. our ability third million

China we Golden saw that accelerated some addition collections we early Week and October drove as customers paid started of performance period inventory we in anticipated, on than better X. that, advance to was certain that customer the holiday in In

I'll were a well to very than Our performance more year about talk year-to-date cash in that we higher flow us projecting. flow what free positions cash deliver full previously moment.

year few on QX to outlook, wanted Before Delphi take XX expected Slide outlook. I Technologies discuss I updated our with a of minutes Starting review our to impact the revenue. on full

and acquired which quarter be of revenue million We expect year. fourth $XXX QX last to revenue $X Delphi's XX% will contribute to our billion between X% results, the to businesses down from reported

we've baseline the be of inclusive actions. benefits this synergies. for combustion This million businesses result to you Delphi told range conversion partially $XX year-over-year margin in restructuring the expect of adjusted of this offset to the operating margin is X%, downside what at We X.X% on This in lower expect business. to portfolio the the only with is being point in line the by for from

of initiatives to XXXX levels. fully Specifically, synergies the recovery of to before level a the until XXXX's implemented performance we both don't pre-COVID expect to see revenue to we stand-alone in restructuring business see and return margin

annualized performance to $XX businesses, we $XX million In amortization around between addition the $XX purchase have million and means anticipating Delphi price baseline the in expect million amortization. we're of each of to quarter. That

we approximately quarter. And transaction-related impacted adjusted from of of closing during impact inclusive be the QX cash free cash perspective, from operating the $XXX expect of the the quarter fourth million million achieving that amortization, of income at this costs million flow acquisition. So $XX synergies expect cost finally, a our by or to and flow to we $XX around

have that Slide impact on our good year XX. understanding acquisition full of Now is outlook you expected results, to Delphi the a consolidated QX talk let's how about our

end year Also, guidance of outgrowth global XXX organic decline basis points. XX.X% XXXX approximately is of by at is from to the range margin Technologies, to prior we which From in revenue be XX%. the these assumptions end the Our that revenue being This Fred the production in our assumptions, XX% we basis be Delphi adding expect expect on our to to with drive our guidance $X.X range Then of down margin with XXX to Based year to year-over-year. full in year X.X%. we're a to decrementals operating QX legacy the of XXX points, for to full XX.X% full billion. BorgWarner high XX.X% revenue on X.X% XXXX reviewed market total XXX projecting the business guidance. of consistent our $X.XX the based adjusted perspective, prior delivering would to contemplates the earlier, range, market

QX adding long-term difficult we mix, expectation comparable; Delphi QX of implies a noted adding organic COVID-related the this range a and year investment with reasons inefficiencies operational earlier. that we Now higher opportunities; to billion of fund in million guidance $XX from the we'll margin performance. relatively that also I makes be of This experience QX, to our lower that XX.X% a and in operating higher R&D decremental revenue the continue impact costs we're our that result up will for margin a ago, strong expect which $X by as our of means growth the contemplates much Technologies about which to as some impact somewhat for margin level

generated can free free end very of Slide Let's cash flow, view as we challenging cash environment. turn we've guidance. $XXX Year-to-date, a tremendous which achievement where to our market XX, see you this flow in million updated

for COVID-XX we same and manage working themselves. prudently. taking speak time the The expenditures the margins, capital As hit, focused decremental managing while to at on capital our actions necessary team results

cost full continue expect flow, $XXX positions increase transaction, million investing cash free year, the to we guidance. synergies cash with of of million the $XXX and I we million to we expected $XXX achieving ahead But to before shareholders. maintaining the transaction-related growth focus flow Technologies to from still look now Delphi free million that As $XXX while flow $XXX million and generate between mentioned from to our even deliver prior a costs the expect QX future in a opportunities, earlier. our This of significant arising on cash returning in us to headwinds

we So pressures, let the me We expectations. delivered we outgrowth quarter. summarize margin seen earnings our to strong a and our industry the quarter high for end a delivered flow, my In financial of for we quarter, remarks. recent another had to of basis. on at we've levels And operating in cash strong converted years. the spite back Simply put, both free overarching year-to-date

this margin our back for wrap we're the raising free guidance So up of like as I'd that, turn our the to quarter With ahead and and expectations the we year, flow. reinstating XXXX cash confident Pat. both in in balance revenue and call look over to to

Patrick Nolan

Kevin. open the up questions. call you, we're to Jerome, ready Thank for

Operator

[Operator Instructions].

America. question Bank with first comes Your of from John Murphy

John Murphy

But units were they into XXX,XXX you about a we're on just kind Kevin, around I business. through the trucks on your of a like want XXXX product going America. I'm it has. quarter. truck with in going down and first very to strengthening ask beyond being curious just And what F-XXX, and quarter into about launches. this in good fourth of right? for sort think boom, then North The fourth it's we It's question talking then I impact, the some that go XXXX while, that's think seems been but for new as

on and pretty Just going less able maybe, side. curious how opportunity your there of in might forward, profit you and know little what still Fred, to than it's it's kind backlog think I a about win. sexy be is that EVs, but sexy you the what

Kevin Nowlan

with start I'll that. Kevin. it's John,

are and little more that outgrowth, in QX. changeover, us. for benefit on seeing a But a revenue our perspective, a from bit QX, having in we Ford us as bit impact alluded you from truck a the in revenue been for say, is the little perspective. F-XXX, a has impact obviously, the an it's mix million about but On both a $XX I'd to, QX so then

is when seeing, what part a we've than the skewed having talk we're of in mix So about benefits that truck of towards we it car more that's bit North American a mix seen benefit little past. the than

is the what reaping our now, right seeing benefits that that So in we're outgrowth. we're of and

Frederic Lissalde

John, exactly balanced that of why combustion, highlight a the is And are want to just with capitalize fact across this we hybrid, I portfolio strategy to electrification. on great Yes. electric, growth executing the

you the and are IHS look question be vehicles vehicle. the high your XX% produced at X to take level, you If if is about saying billion now it's that electrification. at XXXX, going between

mistake a of will round it Let's billion to X combustion XX%. environmental Out as a would products that either be on question good vehicles. And supplying together have And that vehicle, to vehicle revenue ignore example. is as profitable a XXX that to well million hybrid. with the architecture believe think be I XXX cash-generating it opportunity a as or engine, combustion a million your we those

John Murphy

-- if mean, you I understand just then Kevin, comps just, in comps. In business. incredibly still tougher. bit but headwind. getting and then a a headwind the -- helpful. will your second But in can And persist, I diesel there's follow-up also the the some presumably, That's recovery are a business, diesel Okay. question Europe, Delphi's get mean and to and I little

just So And if that this forward? should we're the you think worst mix through about how curious we going of think shift.

Frederic Lissalde

actually going from you're pretty to The rate John, going QX QX. down. significantly take and diesel right, is So down the is down

it's is outgrew Certainly, more last to out are this the it touching And that tough we're to heavily to market But be drop it's going yes, diesel headwind for where bigger And us. bit lapping ones. going a since weighted of we essentially And year. the smaller we a We so starting year, are -- diesels. QX stops. on outgrowth. last figure

our is And Now the gasoline will remember diesel. headwind for loss compensating you moderate this that, some of that the in may of product lines, future. growth in on overall, element

Operator

question Picariello Your James next Markets. KeyBanc Capital comes from with

James Picariello

the is synergy next baked should year? fourth strictly Just anything place cost-out on synergies, Delphi take of the into outlook? Or quarter the capture timing the

Kevin Nowlan

in expecting deck. our the in the of fourth we're already on In $XX we that Yes. synergies slide showed quarter, numbers million those

in of million $XX includes coming synergies that So through QX.

James Picariello

Got it.

three then of, sustainable And guidance mean, now behind The quarterly drivetrain's margins rate the And some from I double-digit clearly strong drivers it, Okay. on mean performance, run color quarters seen segment in call outperformance. the through this product your in that this could came factor regional does we've I market quarter. and business? provide momentum around particular? you a standpoint for drivers

Frederic Lissalde

outgrowth on transmissions and drivers the were in profile. China So strong a North key mix in American dual-clutch product QX,

half was into into we on DCT converted going programs. and -- and growth of the XXXX, that expectation those going our above second certainly, in China and well XXXX So this

James Picariello

just there And operationally. incremental me. given expectations this any it. half change second year's Is one for year last one Got stronger performance next your for the in margins,

of to thinking a Just few BorgWarner's the margin incremental more were is there right next -- still difficult months an business base are year? relative comps target for element how you ago? about XX% Or things

Kevin Nowlan

of the hey, this I we XX% out step but coming revenue as as mid- Yes. to markets to earlier what like a at we here. was and we snapback we when long-term of back, we said the talking about lows That's of recovery generate revenue. decrement thought speak that get high of it. XX%. rebounded short-term a saw recovered as given And incrementals that deliver the about mean end were COVID same that's seen on company. taking a should or rate QX continue then said, teens profile that we at is, you We pace in in we rebound the at result we've year what which just we that's hey, still thought from the a COVID-XX, those decrementals we markets end would results, as incrementals be think about end incremental able really the And market effectively at the converter not incremental beyond being you ourselves snapback which in to

look top So next that. year at XX% on and I then of wouldn't on layer

of billion QX, effectively, like at revenue the we're of and of in If to hoped expected. that XX% north you $XX profile, we've back incrementally had at revenue on kind a and our look converted and back we annualized here QX

James Picariello

Okay.

at same half a the So first the the that at in rate. year maybe second next in first you And normalized had half, half in XXXX. decrement then

Kevin Nowlan

Yes.

a that's year-over-year you're in off see be a market the QX of that you second fair expect think in getting think incremental doing -- end lows XXXX. to I norms, we market at comp, can coming the hopefully, way because we're it back about because if an to type end quarter, -- we're to to off that of QX should

should those would you more of markets types -- should normalized growth at it you back see it that above of our type was historically. range. to be to getting But beyond So expect back of that, way the be and XX%-ish incrementals

Operator

question Your next from Levy Suisse. Dan comes with Crédit

Dan Levy

I a wanted your to business. First, turbocharger question just ask core on

largest terms development near there the a anticipate of turbocharger bankruptcy the pricing the trends. maybe those competitive in midterm? sense or or potential trends business filing over with in of margin competitor is similarly, whether you've incremental the shifting by you seen see your any this could maybe to maybe price or you Given us space, margin underlying And give then,

an on development. turbos the update given just So

Frederic Lissalde

into where efficiency major not competitive standpoint competitive because that seeing any a our certainly in we've leadership balance that turbo we're customers advantage, from is what turbo business, past. field. It on pricing for absolutely strength in economy. important seeing changes direct We're remains fuel is a seen translates is impact the that's say would I a What product Yes. and sheet the

like product to business, a a this field, in in efficiency our the provide lot can it's in business so, our customers. leadership and we lot of around And

Dan Levy

ultimately balance And a show or that it the how of up you sourcing strength that line? reason I customers you the for would backlog hitting in theoretically revenue some view a that as to incremental appreciate long good to sheet the have. If as revenue take use solution,

Frederic Lissalde

a It to to event the or revenue from sourcing booking line about a from X event. would take years hit X

Dan Levy

Okay.

term. So nothing near

are some And I and the sort this maybe second, just Europe Europe seeing pronounced maybe why for these with then, seeing know wondering give this to as the we seen had I color powertrain to more wouldn't that's better But sharp those shift about just rolling ask outgrowth it more meet targets. scrambling why emission quarter launch to as mean, we're tough advanced in outgrowth choosing a your Is they now? trends impacting know on But EVs not And obviously Great. EV now And wanted we're automakers solutions, by Okay. you're not address inflection comps, I couple in powertrain-type they're a don't trends automakers Europe. have you in powertrain. hybrid and years. of that diesel could solutions issue with us off. you simply portfolio, right just -- it's hitting and you. the scramble, portfolio it enhanced and of right

Frederic Lissalde

into point. think past out in the is already you We've of generation in way and hybrids I announced hybrids more my XXXX is extremely the sequentially you few not beyond. we quarters. hybrids. wins We're are into a answer, come plug-in and higher-voltage factor. I that a active pointed pointed diesel mean which half of will first And certainly second active So a good the the decline

Maybe the decline went to quarter-over-quarter So from take point. is over biggest quarters. QX, diesel the one is past element that which rate XXX you key of down the one QX -- when diesel several that's the for points, basis

Dan Levy

Okay.

that on So there. what's of explains lot a going

Operator

question with next Oppenheimer. Your Noah Kaye comes from

Noah Kaye

on be tracking? business? the and front you with that What scaling those GDI in priorities of So of some launches? integration going and in we has the to of Delphi knew little ramps Where hit kind your some of How some terms us power that are the in there? of obviously, running the the the on terms execution customer of talk ground bit of you is them had a their see Delphi up focus you about outreach. to Can here electronics do

Frederic Lissalde

Okay.

some I helping coming of first lot laser-focused demand. plants I the all, bookings we're products. From a see launch GDI, see on also, into their way. launch of And perspective, our a So to

power mentioned I fuel that in from have, We business team excellent of We injection announced or -- we Similarly, the disturb on any business a And to put unit very just on BorgWarner. month. focus launches our form. not few into system before, of bookings business shape unit the any as PDS electronics, a untouched the over high a operators those effectiveness left past in launch unit. across order also

Noah Kaye

being do that hoping reaching to you over in in corporate average or was kind than on businesses And as learned you've of got pricing glean able do -- confident anything that I a you've or do terms incrementally businesses? don't you've know how merger able pricing margins But those stand-alone and how been more closing. much better think to in the in the contract Delphi more those you makes to less X.X about And next information else of basis the since structures breakeven years? the

Frederic Lissalde

the not We've no past over different anything so than month, dramatically surprises seen looked we what at us. for

Kevin Nowlan

And disciplined a are I think we instilling BorgWarner culture. perspective, the from

approach business portfolio It's part BorgWarner the Delphi legacy businesses part of acquisition take of same entire that to the the we of at we programs we'll acquired have that's hold, a at maintaining we same position. of as any We it's the a new ROIC discipline focus we the have look of programs. as whether And driving a XX% on a BorgWarner. discipline that towards new or

Noah Kaye

really the more of activity And It's the if quoting sneak just you're space. overall booking and seeing in. I pace great. That's around could in activity one

ask, awarded the what just we've you of conditions and how pandemic. to mean, that, think as But I if cadence the and think activity exiting here? in in I some seen was heard were still development are from for about And ongoing I activity year engineering interestingly, XQ. were the kind the have surprising some pace then, of you want there booking level, we bookings peers a

Frederic Lissalde

you, agree with I Noah.

of good think I the amazing prior and are And during proxy forward spending teams more QX than strive push we in still pandemic. beings human year. a can that. and R&D We're it's programs how

from don't perspective. And so we slowdown trend any see electrification an

this is those to on, very becoming going sell be This able so forward. very, And customers on important still important for working to very powertrain very, our carry them just to for architectures. is new

any So we see field. our slowdown don't in

Operator

Instructions]. [Operator

question comes Saager from Your next John Evercore with ISI.

John Saager

on It's X Congrats to there's initial John I'm synergies finalizing to sweep Delphi margin the wondering or X, we if potential of on Chris Democrat for the strategy any saw the were on a sort upside McNally. if and Tuesday. on Slides go-to-market order from to We outlook Saager get electrification transaction. bookings

Kevin Nowlan

just run say, about feel margin perspective, margin the business outlook, next a a and we the mean, I'd I margin from stepping direction ability back to look still Yes. from percent at good we deliver rate we're years. the over the that as taking the the XX-plus few

strategy quickly hybrid of might others. those depending I we it's is part successful be to the but our that, portfolio across environments, combustion, think and on being than the are in in terms portion election do, of of positioned balanced an more the impact on the of what near all term hey, TBD, electric which of growing

acquisition We'll look think to electrification the Delphi they capitalize power I electronics there if electronics more that's here election, to bring only emphasis Technologies great. that And that. on and will the with an is the capabilities following that So table. on help

John Saager

Sure. integration could Makes about and product an Is components? think that full for words, the integrated module, drive Borg? a BWA the does it care the does highest-margin In critical logical the one if one other to sense. versus just be OEM fully you're BorgWarner sources the And then components. as then of of solution integration

Frederic Lissalde

components. a we had do partner for be happy provide We the to and to also happy serve to system provide our so and like Mach-E. be we'll customers, We'll

invested or at whether For getting us, the we it's run and we system the company component. with a hurdle a look on capital, will same return rates,

John Saager

possibly the integration then just that could the module, you have? full And be is the highest-margin drive do product that Okay. -- you think -- like,

Kevin Nowlan

on into get system the But as a around an driving discipline. offering, than a component specific our may products. get levels look Obviously, particularly just different would same whether don't would higher amount integrated return as we has you if We say, mentioned, it's invested overall, capital investment an at have we a dollar components, Fred capital. They that margins the same it's of drive our all of or to of module, But I selling drive requirements. discipline component. it individual

capital, the XX% the to a have of or whether of discipline return opportunity more employed the target, you system. it's dollars. so maintain on component terms that same a generate in But And the we

Operator

from comes Brian question next with Barclays. Johnson Your

Brian Johnson

Yes.

you Could kind question. the that guess And for maybe that things of for questions iDM And OEM highly you're most or inverter with fair components opposed the that to between couple Page are inverter of versus there. to the supply inverters any X that a power then is Delphi themselves of that down like electronics characterization? chasing looks engineered it's more a ability Is on It bundled got of to into up designed very I following Just box, related. the be into integrated part to how component are you represented drill components dynamic? integrated a producing? the of as comfortable line opportunities modules terms in stand-alone as bit close are opportunities on the BEV. little motor you BEV a product

Frederic Lissalde

in different different Brian, of the go system. funny some full direction is customers in-sourcing in that and programs outsourcing watch And even first, customer, between within go it to kind may a direction.

the important able to design by And they be the customer from a BorgWarner the done it's so why, what optimization to system do. can of to be talk that can look first, versus that's perspective at to

understand system, enabler it's Secondly, we talking a the we to is and system, system, a not full from customers, do only we are to understand able them And an sell system. but motor to absolutely talk an full can being sell mechanical full when to that also enabler to they electronics, about but components.

transmission does the On transmission. a the when probably, the side, do full system, they'll customer most

On a outsourcing. both is the there of motor side, in-sourcing, mix

as be the call, might in-sourced I the On the the component be mentioned, think, inverter by last I side, customer. has the likelihood less this quarter that at to

has volume lot a the can silicon high is of great alluded but and prepared those is my really, technology around very XXX-volt you to technology are that. limited well And standpoint. speak And What controlled. an that BorgWarner I really, managed and from I That a there inverter to discussion tell not remarks inverters. to win carbide that really in so components,

tailwinds systems some and see So both. good those we components, on

Brian Johnson

or just that BEV a they'll The Congratulations the Volkswagen to the And opportunity outsource when commonality Is think just those are iDM? about is out, launch. the on willing any BEV, to Ford of iDM of sterling. multi OEMs the their wins/upcoming Okay. to follow-on. the whether iDMs we that large whether be -- Or for outsource types of are crystallized? components looking these skateboards some skateboards going those are whether and GM coming there

Frederic Lissalde

common or the don't see characteristics characteristics. see temporarily, start. the OEMs element little through OEMs start and obligations common But in-sourcing a works going don't of some the we see We that that No. to have a in-source of more outsourcing. we their councils that, is at One maybe things vis-à-vis bit like

on potentially have We businesses getting system X in regions opportunities of all full standpoint. IDM the major

Operator

Your next Jefferies. comes Kelley from with question David

David Kelley

Can you're give Maybe to the there? the margin savings still year. you are how $XX for just quarter. on track incremental if a sense in just curious fourth the BorgWarner-specific us actions And assumption going in for the million with starting restructuring factor this for

Kevin Nowlan

of on objectives that a $XX is track on out you basis that the achieving in BorgWarner the a from providing. we range restructuring million definitely tailwind that it's terms year-over-year before. full $XX for And laid should savings perspective of perspective, that Yes. million terms QX year From in we're the restructuring in a to the assume

David Kelley

I That's your then Great. exposure. wanted about helpful. Okay. also ask commercial to And vehicle

and elsewhere. are well. that We in that it We've as as see regions? China strength off been curious here? seeing others you starting to from tail what the you're signs hear relates recovery starts in to in noted weakness you China exposure to Do and the were hearing year-end. of think some CV tailwind You to And trajectory other life

Frederic Lissalde

out of very is strong, been still strong, if has have on-highway, is strong, we see But It to going stronger and off-road this figure carry and expected. very slowing we both to than China, is down. CV not on. don't signs and demand easy the So is

electrification up, going towards electric. cell and an in from off-road business For a we too. on-highway. see standpoint But see too, It's of is battery picking What also we pretty other commercial Those to propulsion appetite standpoint, regions, architecture, move long to we vehicle trend, take customer or cycles commercial or hybrid vehicles, that fuel that time. are their either see solidly.

Operator

[Operator Instructions].

next Capital Spak RBC with Your Joseph question comes from Markets.

Joseph Spak

curious your as your of electrification is And you in to wheels. power had and if sort sort on in where I middle, will, understanding my talked headed guess, about vehicle like larger is you a I as But these closer that's positioned accommodate of your product know portfolio. iDM. do it of wheel. being go whether of to what come things putting there, really And sort just the question, I seems the on electrified. the of larger some on are is market transferable to about your shown, motor iDM capabilities they I'm you an and the can offerings those programs vehicles some to or

Frederic Lissalde

path don't at in-wheel future, most iDM we the for feel having probable now, that we still going to motors. closer foreseeable the Right but path forward, looking growth a We're traditional understand We is see now, Yes. a the is, structure Joe. architecture that in technology. that to

Joseph Spak

but about closer what sort But like wheel, the that structure. some in of seem maybe electrified not way using the Okay. the to be to wheel larger the out coming all of pickups just

Frederic Lissalde

question. to particular. to to go answer one back that Joe, have on I equipped not I'm have you, -- this to I come Yes.

Joseph Spak

Okay. Sure.

Frederic Lissalde

are wheels. would characteristics have what when you're motor, I the have going still to what a though, or the the to say, wheel closer whether you're I and can't to Now, an going the you still different not, products those closer is get of answer inverter. those is But precisely motor to

come I'll So back to you.

Operator

Mr. Nolan, are hand queue. concluding you questions I it back in to there remarks. for no the further will

Patrick Nolan

your all you and today, helpful taking you time for for thank questions. the Thank

have call. today's you to Jerome, me. can conclude any If reach With follow-ups, that, to you free out feel

Operator

XXXX conclude BorgWarner Third does the That Quarter Results Conference Call.

You may now disconnect.