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BORGWARNER Q2 2026 Earnings Call Presentation August 5 , 2026
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2 Forward-Looking Statements This presentation may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act that are based on management’s current outlook, expectations, estimates and projections. Words such as “anticipates,” “believes,” “continues,” “could,” “designed,” “effect,” “estimates,” “evaluates,” “expects,” “forecasts,” “goal,” “guidance,” “initiative,” “intends,” “may,” “outlook,” “plans,” “potential,” “predicts,” “project,” “pur sue,” “seek,” “should ,” “target,” “when,” “will,” “would,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Further, all statements, other than statements of historical fact, contained or incorporated by reference in this presentation that we expect or anticipate will or may occur in the future regarding our financial position, including our guidance for full year 2026, our business strategy and measures to implement that strategy, including changes to operations, competitive strengths, goals, expansion and profitable growth of our business and operations, plans, references to future success, including the anticipated benefits of increased investments in research and development, our new business awards and other such matters, are forward-looking statements. Accounting estimates, such as those described under the heading “Critical Accounting Policies and Estimates” in Item 7 of our most recently filed Annual Report on Form 10 -K (“Form 10-K”), are inherently forward-looking. All forward-looking statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. Forward-looking statements are not guarantees of performance, and the Company’s actual results may differ materially from those expressed, projected or implied in or by the forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Forward-looking statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual res ults to differ materially from those expressed, projected or implied in or by the forward-looking statements. These risks and uncertainties, among others, include: the success of our portfolio strategy; supply disruptions impacting us or our customers, commodity availability and pricing and an inability to achieve expected levels of recoverabili ty in commercial negotiations with customers concerning these costs; conditions in the automotive industry; competitive challenges from existing and new competitors, including original equipment manufacturer (“OEM”) customers; the challenges associated with rapidly changing technologies, including artificial intelligence, and our a bility to innovate in response; the difficulty in forecasting demand for electric vehicles and our electric vehicles revenue growth; potential future changes in laws and regulations, including, by way of example, taxes and tariffs, in the countries in which we operate; potential disruptions in the global economy caused by wars or other geopolitical conflicts; the ability to identify targets and consummate acquisitions on acceptable terms; failure to realize the expected benefits of acquisitions on a timely basis; the possibility that our 2023 tax-free spin-off of our former Fuel Systems and Aftermarket segments into a separate publicly traded company will not achieve its intended tax benefits; the failure to promptly and effectively integrate acquired businesses; the potential for unknown or inestimable liabilities relating to the acquired businesses; impa cts of our exit of the charging business; our dependence on automotive and truck production, which is highly cyclical and subject to disruptions; our reliance on major OEM customers; impacts of any future strikes involving any of our OEM customers and any actions such OEM customers take in response; fluctuations in interest rates and fo reign currency exchange rates; our dependence on information systems; the uncertainty of the global economic environment; the uncertainty surrounding global trade policies, including tariffs (and any potential refund recovery of tariffs imposed under the International Emergency Economic Powers Act) and export restrictions and their impact on the Company, its customers and its suppliers; the outcome of existing or any future legal proceedings, including litigation with respect to va rious claims, or governmental investigations, including related litigation; impacts from any potential future acquisition or disposition transactions; and the other risks discussed in reports that we file with the Securities and Exchange Commission, including in Item 1A. “Risk Factors” in our most recently filed Form 10 -K and/or Quarterly Report on Form 10-Q. We do not undertake any obligation to update or announce publicly any updates to or revisions to any of the forward-looking statements in this presentation to reflect any change in our expectations or any change in events, conditions, circumstances, or assumptions underlying the statements.
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3 Non-GAAP Financial Measures This presentation contains certain information about BorgWarner’s financial results that is not presented in accordance with U.S. GAAP. Such non-GAAP financial measures are reconciled to their closest U.S. GAAP financial measures in the Appendix. The provision of these comparable U.S. GAAP financial measures in the context of guidance for 2026 is not intended to indicate that BorgWarner is explicitly or implicitly providing projections on those U .S. GAAP financial measures, and actual results for such measures are likely to vary from those presented. The reconciliations include all information reasonably ava ilable to the company at the date of this presentation and the adjustments that management can reasonably predict. Management believes that these non-GAAP financial measures are useful to management, investors, and banking institutions in their analyses of the Company's business and operating performance. Management also uses this information for operational planning and decision-making purposes. Non-GAAP financial measures are not and should not be considered a substitute for any U.S. GAAP measure. Additionally, because n ot all companies use identical calculations, the non-GAAP financial measures as presented by BorgWarner may not be comparable to similarly titled measures reported by other companies.
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4 Agenda ► Joe Fadool Chief Executive Officer ► Craig Aaron Chief Financial Officer ► Q&A
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5 Strong Second Quarter Execution, Remain Focused on Long-Term Profitable Growth and Value Creation $3,638 $3,648 Q2 2025 Q2 2026 $1.21 $1.42 Q2 2025 Q2 2026 $507 $492 Q2 2025 Q2 2026 ▪ Organic net sales performance modestly ahead of market, excluding battery sales decline ▪ Adj. operating margin and adj. EPS expansion supported by strong cost controls and share repurchases ▪ Additional program awards across Foundational and eProducts ▪ Continued product readiness across data center and other industrial markets portfolio ▪ Strong liquidity and free cash flow support Q2 share repurchases, and $1B share repurchase authorization increase Net Sales Free Cash Flow*Adj. EPS* *Organic net sales, adj. operating margin, adj. EPS and free cash flow on this slide are non-US-GAAP measures. See reconciliation to US GAAP in Appendix. Organic Net Sales* Decrease of ~1.2% 10.3% Adj. Op Margin* 11.3% Adj. Op Margin* $ in millions, except EPS Adj. EPS* Increase of ~17% Relatively Flat
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6 Seven Awards Across Portfolio and Regions Inverters ▪ Two high-volume extension awards with a major European OEM for plug-in hybrid and 800V battery-electric vehicles ▪ Production is expected to begin in 2029 Variable Cam Timing ▪ Conquest award with a major Chinese OEM and a program life extension award with a leading European premium OEM ▪ Production is expected to begin in 2026 and 2027, respectively Torque-on-Demand Transfer Cases with Mechanical Lock ▪ Award with a Chinese OEM for a newly developed, full-size SUV ▪ Production is expected to begin in the fourth quarter of 2026 Integrated Drive Modules (iDM) ▪ Award with a global OEM utilizing BorgWarner’s next- generation iDM technology, setting a new benchmark in performance, efficiency and system integration ▪ Production is expected to begin in 2027 eTurbo ▪ New program award with a major European OEM for an advanced hybrid car application ▪ Production is expected to begin in 2029
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7 BorgWarner Continues to Improve Product Readiness for Data Center & Other Industrial Markets Portfolio Power Generation Energy Storage Power Conversion Expected SOP 2027 >$300M Launch Year Sales Turbine Generator System ▪ Met CARB-level emissions tests ▪ Component UL certification expected to start in September ▪ Building construction inline with expectations ▪ Capital equipment installation expected to begin during Q3 Quoting Continues Est. 2027 Production Ready Testing Progressing Est. 2027 Production Ready v Battery Energy Storage System ▪ Supporting varying use cases in data center environments ▪ Portfolio includes DC blocks, UPS and high-power racks, and controls ▪ Modular, scalable, and cell chemistry independent ▪ Customer validation and UL compliance processes advancing Bi-Directional Microgrid Inverter ▪ Samples shipped to four customers and discussions with several others ▪ Existing scale and established supply base recognized by potential customers ▪ Gen 2 designs currently under development incorporating customer feedback ▪ Developing high-power full-voltage coverage with portfolio expected to span 400V to 1500V *TurboCell is available exclusively through Endeavour’s Edged Infrastructure solutions division.
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8 Q2 2026 Net Sales Walk $3,638 $3,648 $54 $(62) $18 Q2 2025 net sales FX Battery & charging sales ex. FX Organic net sales change ex. battery* Q2 2026 net sales $ in millions ▪ Organic net sales* down ~1.2%, or modestly better than industry production, excluding Battery Energy Systems sales decline ▪ North America – Outgrowth supported by transfer case volumes ▪ Europe – Below market due to a decline in Foundational thermal products and battery sales, partially offset by eProduct growth ▪ China – Roughly in-line with market volumes *Organic net sales change on this slide is a non-US-GAAP measure. See reconciliation to US GAAP in Appendix.
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9 Q2 2026 Financial Results & Adj. Operating Income *Adj. operating income, adj. operating margin, adj. diluted EPS and free cash flow on this slide are non-US-GAAP measures. See reconciliation to US GAAP in Appendix. $373 $413 $5 $7 $28 Q2 2025 adj. operating income* FX Exit of charging business Organic change, productivity, cost controls & restructuring Q2 2026 adj. operating income* $ in millions ($ in millions, except per share amounts) Non-GAAP Financial Information Three months ended June 30, 2026 2025 Net sales $3,648 $3,638 Adj. operating income* Adj. operating margin* $413 11.3% $373 10.3% Adj. diluted EPS* $1.42 $1.21 Free cash flow* $492 $507
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10 2026 Outlook and Other Items Full-year Net Sales Outlook Market & Earnings Outlook $14,316 $14,000 $175 $(241) $14,300 $(250) $59 2025 net sales FX Battery sales Organic net sales change ex. Battery* 2026 net sales 10.7% to 10.9% Adj. Operating Margin* 10.7% Adj. Operating Margin* $ in millions, except EPS Prior 2026 Guidance Revised 2026 Outlook Organic net sales change* (3.5%) to (1.5%) (3.5%) to (1.5%) Adj. operating margin* 10.7% to 10.9% 10.7% to 10.9% Adj. diluted EPS* $5.00 to $5.20 $5.05 to $5.30 Free cash flow* $900M to $1,100M $900M to $1,100M *Organic net sales change, adj. operating margin, adj. diluted EPS and free cash flow on this slide are non-US GAAP measures. See reconciliation to US GAAP in Appendix. Note: FX rate assumes $1.14 for Euro.
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11 Disciplined and Consistent Share Repurchases with $1B Additional Authorization Share Repurchases Remain an Important Component of Shareholder Value Creation $1B $650M $350M $1B $1.35B 2025 Authorization Repurchases Since Q3 2025 2025 Authorization Remaining 2026 Authorization Est. Authorization Remaining End of Q2 2026
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August 5, 2026 Q2 2026 Earnings Call Presentation THANK YOU
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13 APPENDIX
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14 2026 Light Vehicle Market Expectations 15.3 17.0 32.9 93.1 BorgWarner Global Market FY’25 Actual FY’26 Est. FY’25 Actual FY’26 Est. FY’25 Actual FY’26 Est. FY’25 Actual FY’26 Est. North America ChinaEurope 90.0 to 92.2 YOY (3.5%) to (1%) 14.9 to 15.5 YOY (2.5%) to 1.5% 30.6 to 31.5 YOY (7%) to (4%) 16.7 to 17.2 YOY (2%) to 1% Note: Actual and estimated volumes are BorgWarner market assumptions. LV Units in millions BorgWarner Estimated LV Weighted Market Down 3% to 0%
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15 2026 Planning Assumptions ▪ CapEx $600 to $700 million ▪ Adjusted tax rate for ongoing operations ~23%
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16 Second Quarter & YTD Reconciliation to US GAAP Adjusted Operating Income and Operating Margin The Company defines adjusted operating income as operating income adjusted to exclude the impact of restructuring expense, merger, acquisition and divestiture expense, intangible asset amortization expense, other net expenses, discontinued operations and other gains and losses not reflective of the Company’s ongoing operations. Adjusted operating margin is defined as adjusted operating income divided by net sales.
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17 Second Quarter & YTD Reconciliation to US GAAP Adjusted Earnings Per Diluted Share The Company defines adjusted earnings per diluted share as earnings per diluted share adjusted to eliminate the impact of res tructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations and other gains and losses not reflective of the Company’s ongoing operations and related tax effects. The impact of intangible asset amortization expense continues to be included in adjusted earnings per share.
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18 Second Quarter & YTD Organic Net Sales Change Organic Net Sales Change The Company defines organic net sales changes as net sales change year-over-year excluding the estimated impact of foreign exchange (FX) and net mergers, acquisitions and divestitures.
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19 Full Year 2026 Adj. Operating Income and Adj. Operating Margin Guidance Reconciliation to US GAAP Adjusted Operating Income and Operating Margin The Company defines adjusted operating income as operating income adjusted to exclude the impact of restructuring expense, merger, acquisition and divestiture expense, intangible asset amortization expense, other net expenses, discontinued operations and other gains and losses not reflective of the Company’s ongoing operations. Adjusted operating margin is defined as adjusted operating income divided by net sales.
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20 Full Year 2026 Adj. Earnings per Diluted Share Guidance Reconciliation to US GAAP Adjusted Earnings Per Diluted Share The Company defines adjusted earnings per diluted share as earnings per diluted share adjusted to eliminate the impact of res tructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations and other gains and losses not reflective of the Company’s ongoing operations and related tax effects. The impact of intangible asset amortization expense continues to be included in adjusted earnings per share.
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21 Full Year 2026 Estimated Organic Net Sales Change Guidance and Outgrowth Reconciliation Organic Net Sales Change The Company defines organic net sales changes as net sales change year-over-year excluding the estimated impact of foreign exchange (FX) and net mergers, acquisitions and divestitures.
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22 Free Cash Flow Reconciliations to US GAAP The Company defines free cash flow as net cash provided by operating activities minus capital expenditures, net of customer advances related to capital expenditures. The Company believes this measure is useful to both management and investors in evaluating the Company’s ability to service and r epay its debt.
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The terms below are commonly used by management and investors in assessing ongoing financial performance: Organic Net Sales Change The Company defines organic net sales changes as net sales change year over year excluding the estimated impact of foreign exchange (FX) and net mergers, acquisitions and divestitures. Market Light vehicle production weighted for BorgWarner’s geographic exposure as estimated by BorgWarner. Outgrowth “Organic Net Sales Change” vs. year-over-year change in “Market”. 23 Key Definitions