BorgWarner Inc. reported its second quarter results for 2023 highlighting the ways it is paving the way for an electric future for its business through its “Charging Forward 2027” Plan.
The company outlined several ways it is making headway on its electric business, including:
- Acquiring the Electric Hybrid Systems (EHS) segment of Eldor for €75 million (approx. $82 million) at closing with a potential additional amount due subject to an earnout. The acquisition is expected to enhance BorgWarner’s capabilities in engineering compact and efficient 400V and 800V on-board chargers while also bringing innovative and cost-effective, high-frequency DC/ DC converter technology to the portfolio.
- Bring selected by a major East Asian OEM to supply inverters and eMotors for the automaker’s new electric vehicle platform, scheduled to enter production mid-2025.
- Securing a contract with a global automotive thermal and energy management solutions supplier to deliver high voltage coolant heaters (HVCH) for use on a series of three electric vehicle (EV) platforms for a major OEM, expected to start production in 2025.
- Being selected by a Chinese domestic OEM to supply its iDM for advanced hybrid vehicles expected to start production in 2024.
At the beginning of July, the company completed the spin-off of Phinia, which completes the disposition pillar of the company’s Charging Forward strategy. It also issued its 2023 Sustainability Report, highlighting the progress
the company has made toward meeting its environmental stewardship, social responsibility and governance (ESG) objectives and outlining additional goals for 2023 and beyond.
In June, BorgWarner unveiled its “Charging Forward 2027,” which included the following 2027 targets: eProduct sales of over $10 billion; eProducts adjusted operating margin of approximately 7%; and Maintaining double-digit margins for Foundational products. The company said it expects its 2023 eProduct sales to be $2.3 billion to $2.4 billion, up from
approximately $1.5 billion in 2022.
Q2 Highlights
BorgWarner’s Q2 GAAP net sales of $4,520 million showed an increase of 20% compared with second quarter 2022. This excludes the impact of foreign currencies and the acquisitions of Santroll’s light vehicle eMotor business, Rhombus Energy Solutions, Drivetek and SSE.
Pro forma for the spin-off of PHINIA, BorgWarner’s organic sales were $3,671 million, up 22% compared with the second quarter 2022.
The company reported U.S. GAAP operating income of $383 million, or 8.5% of net sales, which excludes $91 million of pre-tax expenses related to non-comparable items. Adjusted operating income was $474 million, or 10.5% of net sales. Excluding non-comparable items and pro forma for the spin-off of PHINIA, adjusted
operating income was $369 million, or 10.1% of net sales.
The company also reported net cash generated by operating activities of $280 million; free cash flow was positive $38 million; and pro forma for the spin-off of PHINIA and excluding the one-time spin-off-related cash costs,
free cash flow was a usage of $42 million.
