ギャレット・モーション（GTX）2026年第3四半期決算説明会：産業向け売上の増加に伴いマージン拡大

主要なポイント

• ギャレット・モーションが発表した2026年第3四半期の売上高は9億3,000万ドルとなり、報告ベースおよび定常為替ベースの双方で前年同期比3%増加しました。
• 調整後EBITは1,900万ドル増加して1億5,200万ドルとなり、70ベーシスポイントの為替逆風があったものの、調整後EBIT利益率は160ベーシスポイント拡大して16.3%に達しました。
• 調整後フリーキャッシュフローは1億3,600万ドルに達し、調整後EBITからのコンバージョン率は89%となりました。
• 商用車および産業用アプリケーションは、発電用途の需要好調に支えられ、23%のオーガニック成長を達成しました。
• 経営陣は2026年見通しの中央値を再確認しました：売上高は38億ドル、調整後EBITは5億8,000万ドル、調整後フリーキャッシュフローは4億3,000万ドル。
• 取締役会は新たな2027年向け2億5,000万ドルの自社株買いプログラムを承認し、併せて第4四半期に1株あたり0.08ドルの配当を実施します。

主要財務データ

事業・業績動向

商用車、産業用、およびアフターマーケット需要がギャレット・モーションの売上成長を支えました。商用車および産業用アプリケーションは23%のオーガニック成長を記録し、特に発電向けプログラムが経営陣の事前の予想を上回りました。

同社は現在、産業用売上高が2026年に約2億3,000万ドル、2027年に約3億ドルになると見込んでいます。経営陣は、2027年の数値は約30%のオーガニック成長に相当し、引き続き発電機セット向け用途が主導すると述べています。

ターボ技術分野において、ギャレット・モーションはメルセデスとの間で量産型Eターボプログラムを開始しました。また、ハイブリッド車ならびに中国国内向けおよび輸出向けプログラムをカバーする乗用車案件を獲得したほか、複数地域での商用車ビジネスを受注し、ポラリスとのオフロード用ターボアプリケーションを立ち上げました。

ゼロエミッション技術分野では、乗用車用Eパワートレインの実証実験（PoC）を複数完了しました。大型商用車向けEパワートレインの試験および商用化は、2027年の市場投入に向けて順調に進んでいます。

産業用Eクーリングの試験も、2027年の市場投入に向けて予定通り進行しています。ギャレット・モーションはマルチスタックとのコンプレッサー案件を獲得し、トレインとの試験においても既存ソリューションに対する性能面での優位性が確認されたと述べました。

業績見通し（ガイダンス）

ギャレット・モーションは、2026年見通しのレンジを絞り込みつつ、中央値を再確認しました。公表された中央値は以下の通りです：

経営陣は、事業執行の強靭化が調整後EBITとキャッシュフローを後押しする一方、主に第4四半期に集中する為替の逆風がそれを一部相殺すると見込んでいます。

2027年に向けて、経営陣は成長がプログラムの立ち上がりに直接連動する産業用売上高に対して最も高い確信を示しました。一方で、欧州およびアジアにおける自動車生産と顧客ミックスの不透明感を理由に、2027年全体の売上高予測の開示は見送りました。

リスクと注目点

• 為替相場は、特に2026年第4四半期において引き続き逆風となる見込みです。
• 欧州およびアジアにおける自動車市場環境と顧客ミックスは引き続き流動的であり、2027年の乗用車需要の見通しを制限しています。
• 経営陣は、ガソリン車向けターボの販売数量減少の主因を中国国内市場の低迷によるものとしています。また、売上高は関税転嫁のマイナス影響も受けました。
• Eクーリング売上高の時期と規模は、量産開始、システム統合、および顧客による採用状況に依存します。
• HVACおよびその他の新しい産業向け製品からの利益率拡大は、販売の立ち上がりと生産拡大を支えるために必要な生産能力に依存します。

アナリスト質疑応答の要点

経営陣によると、2027年に見込まれる約3億ドルの産業用売上高の大半は引き続き発電機セット関連が占める見通しです。Eクーリングは同年中に立ち上がり始めるものの、初期の売上寄与は比較的緩やかになると見込まれています。

マルチスタックとの合意は複数の製品および用途を網羅しており、2027年から納入が開始される予定です。ただし、採用率や顧客の生産計画が流動的であることを理由に、経営陣は契約規模の数値化を控えました。

ギャレット・モーションは、産業用売上構成比の上昇が収益性を下支えすると見込んでいます。既存の大型産業用ターボプログラムはすでに整備された生産能力を享受しており、HVAC製品も魅力的な利益率を備えています。ただし、同社はまず生産能力へ選択的に投資する必要があり、数量が拡大するにつれて利益率の拡大がより顕著になると予想されます。

中国市場について、経営陣はギャレット・モーションが輸出用中国車に搭載されるターボチャージャーからすでに収益を得ていることを確認しました。中国自動車メーカーの輸出量やプログラムのライフサイクルは急激に変化する可能性があるものの、同社は自社のグローバルなサポート能力を強みと捉えています。

決算説明会文字起こし全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Hello, and good day, everyone. My name is Alan, and I will be your operator this morning. I would like to welcome everyone to the Garrett Motion Third Quarter 2026 Financial Results Conference Call. This call is being recorded, and a replay will be available later today.

After the company's presentation, there will be a Q&A session. I would now like to hand over the call to Cyril Grandjean of Garrett's Vice President of Investor Relations and Treasurer. Please go ahead.

Cyril Grandjean

Thank you, Alan, and good day, everyone. We appreciate you joining us to review Garrett Motion's Third Quarter 2026 financial results. Our presentation and press release are available on the Investor Relations section of our website. Today's discussion includes forward-looking statements that involve risks and uncertainties. Please refer to our SEC filings, including our most recent annual report on Form 10-K for a discussion of factors that could cause our results to differ materially from these forward-looking statements.

Today's presentation also includes certain non-GAAP measures, which we use to help describe how we manage and operate the business. Please review the disclaimers on Slide 2 of our presentation as the content of our call will be governed by this language.

With me today are Olivier Rabiller, our President and Chief Executive Officer; and Sean Deason, our Senior Vice President and Chief Financial Officer. With that, I'll turn the call over to Olivier.

Olivier Rabiller

Thank you, Cyril, and thank you all for joining us today. We delivered a strong third quarter with organic sales growth, margin expansion and healthy adjusted free cash flow. Net sales were $930 million, up 3% organically as we outperformed light vehicle industry production and grew commercial vehicle and industrial by 23%.

Adjusted EBIT for the quarter was $152 million, which is a margin of 16.3%, supported by favorable product mix and strong year-over-year operating performance. We also converted this into healthy adjusted free cash flow of $136 million.

In addition, we continue to return value to shareholders, repurchasing $57 million of common stock and paying $15 million in dividends. We also repaid $50 million of term loan debt, bringing year-to-date repayments to $100 million. And today, we are announcing that our Board of Directors authorized a new $250 million share repurchase program for 2027.

Finally, we are reaffirming our midpoint outlook as strong operating performance is expected to offset foreign exchange headwinds, mainly in the fourth quarter.

Let me now turn to Slide 4 and discuss our continued progress across differentiated technologies. We made strong progress within the quarter across our differentiated technologies, both in our turbo and in zero-emission technologies. In turbo, we launched a new high-volume E-Turbo with Mercedes.

In addition, we secured multiple light vehicle wins, including for hybrids and programs for both China and China domestic and export. We also won several commercial vehicle programs across all regions and launched a new off-road turbo application for recreational vehicles with Polaris.

In industrial, growth for existing power generation programs further accelerated and exceeds prior expectations. Based on this momentum, we now expect industrial sales to reach $230 million this year and about $300 million in 2027.

In zero-emission technologies, we completed multiple E-Powertrain light vehicle proof-of-concept tests, validating the value of our high-speed architecture. And on the commercial side, we are progressing with testing and industrialization of our heavy-duty applications supporting launch in 2027 for our commercial vehicle E-Powertrain.

Testing of industrial cooling remains on track with launches in 2027. We experienced a strong momentum with a number of customers and secured an industrial E-Cooling compressor award with a new customer, Multistack.

With that, I will now turn the call over to Sean, who will walk you through our financial results and full year outlook.

Sean Deason

Thanks, Olivier, and good morning, everyone. Let me begin on Slide 5. As Olivier noted, we delivered another quarter of strong financial performance. Net sales were $930 million, supported by continued growth in commercial vehicle, industrial and aftermarket. Adjusted EBIT was $152 million, which equates to an adjusted EBIT margin of 16.3%, representing both a year-over-year and sequential improvement, primarily from favorable product mix.

Adjusted free cash flow was $136 million, in line with full year expectations, demonstrating a strong earnings to cash conversion of 89%.

Turning to Slide 6. This bridge highlights our Q3 net sales performance by product category compared to the prior year. In the quarter, net sales increased by $28 million year-over-year or 3% on both a reported basis and constant currency basis. This included an unfavorable 3 points of impact from tariff pass-throughs. Once again, we continue to see growing demand for commercial vehicle and industrial applications, resulting in a strong 23% organic growth year-over-year.

As Olivier shared earlier, we expect industrial sales to reach about $300 million in 2027, representing 30% organic growth, primarily from demand for power generation applications.

Turning now to Slide 7. You see our Q3 adjusted EBIT performance compared with the prior year. Adjusted EBIT was $152 million in the quarter, up $19 million and adjusted EBIT margin was 16.3%, representing an increase of 160 basis points year-over-year, including an unfavorable foreign currency impact of 70 basis points. This performance was primarily driven by favorable product mix and a year-over-year operating performance improvement of $13 million in the quarter.

Now turning to Slide 8. You see our adjusted EBIT to adjusted free cash flow bridge. We generated $136 million of adjusted free cash flow in the quarter, reflecting the strong cash generation of the business. Overall, these results are in line with our expectations with lower cash taxes due to the timing of tax refunds.

Moving now to Slide 9. We ended the quarter with $841 million of total liquidity, including $630 million of available capacity under our revolver and $211 million of unrestricted cash. We also made a voluntary early repayment of $50 million on our term loan in October, bringing year-to-date repayments to $100 million, further strengthening the balance sheet.

Our debt is over 95% fixed and swapped into euro, resulting in an all-in cash interest rate of approximately 5.5%, taking into account proceeds from cross-currency swaps. With no near-term debt maturities and a net leverage ratio of 1.66x, down from the prior quarter, we remain in a strong liquidity position.

Turning to Slide 10. In the third quarter, we paid $15 million in dividends and repurchased $57 million of common stock under our $250 million authorization, bringing year-to-date repurchases to $172 million. We continue to return capital to shareholders in line with our capital allocation framework, returning adjusted free cash flow to shareholders over time through dividends and share repurchases, the amount of which can vary based on market conditions and other factors.

As Olivier noted earlier, the Board also declared a fourth quarter dividend of $0.08 per share payable in December and authorized a new $250 million share repurchase plan for 2027.

Turning now to Slide 11. We are reaffirming our midpoint outlook communicated in our Q2 earnings release for all metrics. Operational execution across the business continues to be strong, supporting higher expectations for adjusted EBIT and adjusted free cash flow. However, these improvements are offset by foreign exchange headwinds, primarily in the fourth quarter.

Please now turn to Slide 12, where we show our updated 2026 outlook ranges. We are narrowing our guidance ranges across all measures, implying the following midpoints: net sales of $3.8 billion or 4% growth at constant currency, adjusted EBIT of $580 million, equating to a 15.3% margin and adjusted free cash flow of $430 million, representing a 74% conversion.

Let me now turn the call back to Olivier for his closing remarks.

Olivier Rabiller

Thanks, Sean. Let me turn to Slide 13. As we discussed at our Technology and Investor Day in May, Garrett's long-term strategy remains clear. We are leveraging our differentiated technologies and proven execution model to continue driving shareholder value. Now let me wrap up on our final slide. We delivered a strong third quarter with significant year-over-year adjusted EBIT margin expansion and strong adjusted free cash flow. We continue to win across our core portfolio with multiple turbo wins in light and commercial vehicles across all regions.

On the industrial side, sales of existing power generation applications continue to outperform expectations. In zero-emission technologies, we secured another industrial E-Cooling Compressor award with a new customer Multistack, and we continue to make progress towards our Industrial HVAC and E-Powertrain 2027 launch milestones. Overall, despite foreign exchange headwinds, our year-to-date performance and ability to adapt in a still uncertain industry environment gives us confidence to reaffirm our 2026 outlook. Thank you for your time, and we are now ready to take questions.

Operator

[Operator Instructions] Our first question today comes from James Mulholland of Deutsche Bank.

質疑応答

James Mulholland

So I just wanted to quickly ask on industrial sales. Genset again was particularly strong. So I think it's probably fair to say it's in the long run going to be higher than that $250 million that you outlined at the Analyst Day. But with $300 million in industrial sales next year, how much of that is going to be Genset versus some of these other verticals?

And then have you reset your expectations as to what that component could actually look like over the longer term? Could you get to $500 million more if you get more supply agreements? Just some thoughts on that, if you wouldn't mind?

Olivier Rabiller

I think you're asking a very wise question. Indeed, when you look at the $300 million that we are doing in industrial sales today, this is mostly Genset. So to your question, will it be more than $250 million? It is already more than $250 million by next year. So indeed, we'll have to come back and probably come back to you at some point next year to give you a little bit of an updated perspective on that.

Now when we look at the outlook of industrial sales for next year, we'll be in the beginning, the ramp-up for E-Cooling, which is the next major product that we count as part of industrial. And therefore, the impact on revenue compared to Genset in 2027 will just be relatively smaller. But it's true that we're also seeing a lot of traction. As we said today, we are signing a new customer for the cooling compressor. And as I was mentioning, we are getting fantastic traction with a number of players into that industry.

James Mulholland

Great. That's helpful. And then I guess touching on those other sort of other contracts within industrials, you have the fairly significant agreements with Trane and Ingersoll and you've never sized them specifically. But I guess to get to those longer-term 2030 goals, do you -- a few more of a similar size, maybe just some smaller contracts? Or just some extra color on that so we could help to gauge your progress towards that?

Olivier Rabiller

So first, we are making very good progress towards that. And we are indeed accelerating our launches versus what we had in mind a few months back, especially when it comes to the new sizes that we want to introduce, the larger sizes. You remember what we presented at the Technology and Investor Day, we are having some prototypes of very large E-Cooling compressors. This is really the piece that we are accelerating right now.

I think it's a little bit too early to give you exactly the size, the size of the contracts and everything because even at our customers, that remains in motion right now. I mean this industry is very dynamic. And therefore, it's difficult to size right away those programs. But we are planning to be and we are having the ambition to be a significant player into that field.

James Mulholland

Thank you very much, guys.

Olivier Rabiller

Today, the feedback we get, I would just add the feedback we get from customers reinforce that view.

Operator

Our next question comes from Nathan Jones of Stifel.

Nathan Jones

I guess following up a little bit, you're making another announcement of an agreement with Multistack here. Chillers are obviously a product that are in pretty high demand right now. I'm wondering if you can provide any more color on the magnitude of this opportunity, when it goes into production for you guys and how that ramps up over the next few years?

Olivier Rabiller

So the deal with Multistack will cover a number of different products, meaning a number of different use cases. It starts with the products that we already announced are ramping up from 2027. So we plan to start delivering them next year. It's indeed a customer that we have been working with in the background for quite some time. And what I would say is that indeed, as we mature our relationship with more customers, indeed, we'll keep all the investors informed about those wins.

I would say it's a little bit premature to give you exactly the size of this one more time for the same reason I might answer before. It's a very fluid marketplace. We are getting into a new technology, that new technology will have an adoption curve. We are very optimistic about it, but we need to have all of that, the start of production, the integration into the system and then the market adoption so that we are more precise on the outlook.

Nathan Jones

Fair enough. I guess the follow-up question to this for me is on the margin side. Obviously, your bridge has a tailwind for 2026 EBIT from a more positive mix as you're seeing faster growth in these new products. That should be structural over the next few years as they continue to grow faster than maybe you previously had planned. Can you talk about the positive impact that will have not just for growth on the top line, but for margin expansion as well?

Sean Deason

Sure. Certainly, you're seeing a favorable margin with our existing products set in the big turbos for industrial. That capacity is in place. And for us, we know how to do it. We've done it for many years. That absolutely is very favorable when it comes to mix impact on margin. That will continue as we have a bigger percentage of our sales coming from industrial.

The same can be said for HVAC, as you all know, margins there are also very good. We have a very differentiated product that produces real total cost of ownership results for our customers and their end customers. And we -- as those sales grow, and I believe I said this at Investor Day, certainly post 2030, when we really see it start to ramp, you should start to see some additional margin expansion. If that comes earlier, you should see that, but we also do have to put all the capacity in place to begin that production.

We're also very cautious as to what we invest in. We're not going to be outside of our financial framework. We will be keeping the critical quality -- quality critical processes in-house. And as we step into it, once we start producing at larger volumes, yes, you would see some margin expansion as it becomes a bigger portion of our sales.

Olivier Rabiller

Yes, makes sense. I mean one more time, just to reinforce what Sean said, we are very much aligned with the financial framework that we've presented in May, and we have -- and all that growth was part of the framework we presented i term of margin...

Operator

The next question comes from Jake Scholl of BNP.

Thomas Scholl

Congrats on the new HVAC award, but I also wanted to circle back on your program with Trane. So you had units in the field doing testing over the summer. So I was wondering if you could share some of what you've learned about the system, about efficiency. And then also if you have a clear idea of what the revenue trajectory will look like after the testing?

Olivier Rabiller

So the first thing I would say is that the tests have really confirmed all the expectations we were having in terms of performance versus performance benefit versus existing solutions. So we are extremely pleased with that. Unfortunately, I will tell you a little bit the same is that we are really circling with our customers now to understand how quick we can introduce those products, which application, which of their customers, which of their programs. We have different size of product as well to launch. So all of that is still a little bit in flux, and we'll keep you updated as we progress. But the tests we are really positive. We are very pleased with that.

Thomas Scholl

And then as we all try to model out the ramp curve from here, at what sales level would you guys expect to start to see some material margin uplift from both industrial as a whole and specifically HVAC?

Sean Deason

Well, if we were just producing that product, the more we sell the better. But obviously, you've got light vehicle volumes as well that are off slightly, and you've got all those factors. So you're going to have to also model out that mix. If we think that light vehicle -- total light vehicle volumes are going to increase over time. And as we stated before, turbo will increase and we'll continue to -- as a technology penetrating and we continue to win share of demand. We -- I mean, we love turbo across all verticals, and we'll continue to produce it. But certainly, look, the more we start to see sales that drop through and ramp up our lines, the better it is.

Olivier Rabiller

You're seeing that already, so.

Operator

[Operator Instructions] Our next question comes from Rajat Gupta of JPMorgan.

Rajat Gupta

Good to see the execution here. It shows like the strength of diversity in your exposure. I wanted to maybe just look into 2027 a bit. I appreciate the color on industrial expansion from $230 million to $300 million. Can you give us any present color on how we should expect the rest of the business to perform? Any preliminary view on puts and takes around just the commercial vehicle opportunity? And just any regional light vehicle production-related trends that you're seeing that might go on the outlook? And I have a quick follow-up.

Olivier Rabiller

Yes, that's a good point. I'm not sure having a crystal ball that is more accurate than anyone else to predict what will happen to the automotive industry in 2027. First, at Garrett, we are always planning in a way to position our costs in a conservative way so that we can deliver. That's something to keep in mind, and we have the cost structure to do that. But the point is today, when you look at it, we had a lot of variations this year across the regions. I would not say that the situation is stabilized. So we are adapting. So far this year, we are growing and we are really on the right side, which means that if you're growing on the market, it means that you pick up share of demand, which is what we've explained we would do for quite some time.

We have a number of also launches into next year that should help us keep on that trend. But the underlying industry today remains a bit of a question mark. And I hope we get a little bit more clarity before the end of the year, situations in regions like Europe or Asia Are really fluid.

Rajat Gupta

Understood. I mean you're tracking like mid-single-digit organic growth like year-to-date, assuming like a pretty similar overall backdrop, next year? I mean, do you think you can sustain at least mid-single-digit growth given what you're seeing on industrial and just what we're seeing on just like commercial recovery in North America in particular?

Olivier Rabiller

Well, what we see is clearly -- and the part that we understand the best, the part that we control the best is indeed industrial because you're less subject to an overall -- the movement of an overall industry right now. Therefore, it's a lot about the ramp-up of the programs and everything else. So this is probably where we're having most -- the highest level of certainty, and that's the reason why today, we said that next year, we should be around $300 million.

For the automotive industry, I think it's just too early and to see the way all of that will play with the mix. You've seen that the mix of our customers, and I think we are not an exception to that is moving in all kinds of directions in Europe and in Asia. So we are highly careful about all that. We are highly careful about the macros. And at this point in time, the focus of the company is to be positioned from a cost standpoint at the right way so that we keep on delivering into next year.

Rajat Gupta

Understood. Maybe just the last one there. Given like some of the recent news around potential for an export quota for vehicles coming into Europe for China, I would assume that, that would be like a good outcome for Garrett, right, given your legacy European exposure and just like the content mix like in some of your China exposure. Just curious like how we should think about the implications of that if those quota do come into place?

Olivier Rabiller

I think anything, any news that can stabilize a little bit the situation that I've said before is very fluid and impacting the mix into our customers is welcome. Now I would say that it's a little bit too early to comment on something where we've not seen the details of either the implementation or the magnitude of that quota. We need to understand the way it's impacting our customers. We need to understand the details.

But I would say we are also working with Chinese carmakers that are exporting. We've made a significant stride over the last 2 years, 2, 3 years on that front. So we are working both ways.

Operator

Our final question today comes from Hamed Khorsand of BWS Financial.

Hamed Khorsand

The first question I had was talking about the Chinese export market. When do you expect to generate sales from there as now you're gaining traction here with the product wins?

Sean Deason

Yes. Well, we're already generating sales. We know that our turbos are going on the engines in Chinese vehicles that are being exported today. And as Olivier mentioned, we continue to make progress with business wins. So the more China exports as we continue to win, the more that will become part of our sales.

Olivier Rabiller

But I think it's an interesting question. We've been doing a good job, I think, in working with our Chinese customers to identify exports. It's true that when they export, they want to really rely on suppliers that have the reputation and the breadth to support them outside of China. And I think we are well positioned there.

Now the point is that in China, the situation just among the carmakers varies very, very quick in terms of export versus their domestic market, how much they export versus what they do locally. And the life of programs is, I would say, much more dynamic than what we have in the rest of the world. So it can go quick one direction or another. But we are well-positioned.

Hamed Khorsand

And my other question was just, can you give a little bit more insights as to what drove the decline in gasoline this past quarter? And is that going to continue? Or how are you seeing that shape out for Q4 and '27?

Olivier Rabiller

When you look at it today, for us, it's much more movements that we've seen in Asia and especially in China. And when you look at the way the domestic market has evolved in China, it has been very much down on the domestic. And that's the part that's driving that, quite frankly.

Hamed Khorsand

Okay. Thank you.

Sean Deason

I would just add to that, that some of that negative is driven by tariff pass-through as well.

Olivier Rabiller

Yes, I'm talking about the number of turbos, then Sean give you the color on the revenue. Indeed, we have a negative pass-through of tariffs that's impacting the revenue.

Operator

Thank you for joining Garrett's Q3 earnings call. This concludes today's session. You may now disconnect.