BORGWARNER WINS NUMEROUS ADDITIONAL ELECTRIC VEHICLE AWARDS, ANNOUNCES EMOTOR ACQUISITION AND REPORTS FOURTH QUARTER AND FULL YEAR RESULTS - BorgWarner
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BORGWARNER WINS NUMEROUS ADDITIONAL ELECTRIC VEHICLE AWARDS, ANNOUNCES EMOTOR ACQUISITION AND REPORTS FOURTH QUARTER AND FULL YEAR RESULTS

Auburn Hills, Michigan, February 15, 2022 – BorgWarner Inc. (NYSE: BWA) today reported 2021 fourth

quarter and full-year results.

Download the PDF below for the full report.

 

New Program Awards and Charging Forward Highlights:

  • BorgWarner’s 2022 electric vehicle revenue is expected to grow to more than $800 million, which is more than double what it was in 2021. Based on new business awards and actions announced to date, the Company believes it is already on track to achieve more than $3.3 billion of electric vehicle revenue by 2025.
  • BorgWarner has secured a contract with a Chinese luxury new energy vehicle (NEV) brand to supply its new integrated drive module (iDM) equipped with its compact 800V silicon carbide (SiC) inverter and hairpin electric motor, expected to launch in 2023.
  • BorgWarner also announced an 800V SiC inverter award with a major Chinese OEM, expected to launch in early 2023.
  • BorgWarner secured an award for a North American generator inverter program with a major global OEM, expected to launch in 2024.
  • BorgWarner will supply GILLIG, a leading manufacturer of heavy-duty transit buses in North America, with the third generation of its battery systems, expected to launch in 2023.
  • BorgWarner announced the acquisition of Santroll’s light vehicle eMotor business in China for up to ¥1.4 billion.
  • BorgWarner sold its Water Valley, Mississippi facility to Atar Capital.

 

Fourth Quarter Highlights:

 

  • U.S. GAAP net sales of $3,655 million, down 6.9% compared with fourth quarter 2020.
  • Excluding the impact of foreign currencies and the net proforma impact of acquisitions and divestitures, organic sales were down 6.5% compared with fourth quarter 2020.
  • U.S. GAAP net earnings of $129 million, or $0.54 per diluted share.
  • Excluding the $0.52 per diluted share related to non-comparable items (detailed in the table below), adj. net earnings were $1.06 per diluted share.
  • U.S. GAAP operating income of $178 million, or 4.9% of net sales.
  • Excluding the $197 million of net pretax impacts related to non-comparable items, adj. operating income was $375 million, or 10.3% of net sales.
  • Net cash provided by operating activities of $542 million.
  • Free cash flow of $370 million.
 
Full Year Highlights:

 

  • U.S. GAAP net sales of $14,838 million, up 46.0% when compared with 2020.
  • Excluding the impact of foreign currencies and the net proforma impact of acquisitions and divestitures, organic sales were up 12.2% compared with 2020.
  • U.S. GAAP net earnings of $537 million, or $2.24 per diluted share.
  • Excluding $1.91 per diluted share related to non-comparable items (detailed in the table below), adjusted net earnings were $4.15 per diluted share.
  • U.S. GAAP operating income of $1,151 million, or 7.8% of net sales.
  • Excluding the $380 million of net pretax impacts related to non-comparable items, adjusted operating income was $1,531 million, or 10.3% of net sales.
  • Net cash provided by operating activities of $1,306 million.
  • Free cash flow of $640 million.

Financial Results:

The Company believes the following table is useful in highlighting non-comparable items that impacted its U.S. GAAP net earnings per diluted share. The non-comparable items presented below are calculated after tax using the corresponding effective tax rate discrete to each item and the weighted average number of diluted shares for the periods then ended. The Company defines adjusted earnings per diluted share as earnings per diluted share adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations, other gains and losses not reflective of the Company’s ongoing operations, and related tax effects.

Net sales were $3,655 million for the fourth quarter 2021, down 6.9% from $3,926 million for the fourth quarter 2020 as the decline in industry production more than offset increased demand for the Company’s products. Net earnings for the fourth quarter 2021 were $129 million, or $0.54 per diluted share, compared with net earnings of $358 million, or $1.52 per diluted share, for the fourth quarter 2020. Adjusted net earnings for the fourth quarter 2021 were $255 million, or $1.06 per diluted share, compared to adjusted net earnings of $279 million, or $1.18 per diluted share, for the fourth quarter 2020. Adjusted net earnings for the fourth quarter 2021 excluded net non-comparable items of $(0.52) per diluted share. Adjusted net earnings for the fourth quarter 2020 excluded net non-comparable items of $0.34 per diluted share. These items are listed in the table above, which is provided by the Company for comparison with other results and the most directly comparable U.S. GAAP measures. The decrease in adjusted net earnings per diluted share was primarily due to the impact of the decline in industry production, higher commodity costs, and the AKASOL AG (“AKASOL”) acquisition.

 

Full Year 2022 Guidance:

The Company has provided 2022 full year guidance. Net sales are expected to be in the range of $15.9 billion to $16.5 billion, compared with 2021 sales of $14.8 billion. This implies a year-over-year organic increase in sales of 10% to 14%. The Company expects its weighted light and commercial vehicle markets to increase in the range of approximately 6% to 9% in 2022. Foreign currencies are expected to result in a year-over-year decrease in sales of approximately $220 million, primarily due to the weakening of the Euro and Korean Won net of the strengthening of the Chinese Renminbi against the U.S. dollar. The divestiture of the Water Valley, Mississippi business will decrease year-over-year sales by approximately $177 million.

Operating margin is expected to be in the range of 8.7% to 9.4%. Beginning in 2022, the Company is updating its definition of adjusted operating income and adjusted operating margin to add back intangible asset amortization expense. Excluding the impact of non-comparable items and the add back of intangible asset amortization expense, adjusted operating margin is expected to be in the range of 10.2% to 10.7%. Net earnings are expected to be within a range of $3.71 to $4.19 per diluted share. Excluding the impact of non-comparable items, adjusted net earnings are expected to be within a range of $4.15 to $4.60 per diluted share. Full-year operating cash flow is expected to be in the range of $1,600 million to $1,650 million, while free cash flow is expected to be in the range of $700 million to $800 million.

At 9:30 a.m. ET today, a brief conference call concerning fourth quarter and full year 2021 results and 2022 guidance will be webcast at: http://www.borgwarner.com/en/Investors/default.aspx. Additionally, an earnings call presentation will be available at http://www.borgwarner.com/en/Investors/default.aspx.
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