개럿 모션(GTX) 2026년 3분기 실적 발표 콘퍼런스 콜: 산업용 매출 성장에 따른 마진 확대

핵심 요약

• 개릿 모션(Garrett Motion)은 2026년 3분기 순매출액 9억 3,000만 달러를 기록하며, 보고 통화 및 고정 환율 기준 모두에서 전년 동기 대비 3% 증가했다고 발표했습니다.
• 조정 EBIT는 1,900만 달러 증가한 1억 5,200만 달러를 기록했으며, 70베이시스포인트의 환율 악재에도 불구하고 조정 EBIT 마진은 160베이시스포인트 확대되어 16.3%를 나타냈습니다.
• 조정 잉여현금흐름은 1억 3,600만 달러에 달해 조정 EBIT 대비 89%의 전환율을 기록했습니다.
• 상용차 및 산업용 애플리케이션 부문은 발전용 애플리케이션 수요 호조에 힘입어 23%의 자체 성장(organic growth)을 달성했습니다.
• 경영진은 2026년 가이던스 중간값을 재확인했습니다: 순매출 38억 달러, 조정 EBIT 5억 8,000만 달러, 조정 잉여현금흐름 4억 3,000만 달러.
• 이사회는 2027년용 2억 5,000만 달러 규모의 자사주 매입 프로그램을 새로 승인했으며, 이와 함께 주당 0.08달러의 4분기 배당금을 발표했습니다.

주요 재무 데이터

사업 및 영업 실적

상용차, 산업용 및 애프터마켓 수요가 개릿 모션의 매출 성장을 뒷받침했습니다. 상용차 및 산업용 애플리케이션 부문은 23%의 자체 성장을 기록했으며, 발전 프로그램 실적은 경영진의 기존 전망치를 상회했습니다.

회사는 현재 산업용 매출이 2026년에 약 2억 3,000만 달러 및 2027년에 3억 달러에 달할 것으로 예상합니다. 경영진은 2027년 수치가 약 30%의 자체 성장을 나타낼 것이며 주로 발전기 세트 애플리케이션에 의해 계속 견인될 것이라고 밝혀습니다.

터보 기술 부문에서 개릿 모션은 메르세데스와 양산형 E-터보(E-Turbo) 프로그램을 시작했습니다. 또한 하이브리드 및 중국 내수·수출 프로그램을 아우르는 승용차 사업을 수주하고, 여러 지역에 걸쳐 상용차 사업권을 확보했으며, 폴라리스와 함께 오프로드 터보 애플리케이션을 출시했습니다.

제로 에미션 기술 부문에서는 승용차용 E-파워트레인 개념 검증(PoC) 테스트를 여러 건 완료했습니다. 대형 상용차용 E-파워트레인 테스트 및 산업화는 2027년 출시를 목표로 계속 진행되고 있습니다.

산업용 E-쿨링 테스트 역시 2027년 출시 일정에 맞춰 순조롭게 진행 중입니다. 개릿 모션은 멀티스택으로부터 컴프레서 사업을 수주했으며, 트레인과의 테스트를 통해 기존 솔루션 대비 성능 우수성 기대를 확인했다고 밝혔습니다.

경영진 가이던스

개릿 모션은 가이던스 범위를 축소하는 한편, 2026년 전망치 중간값을 재확인했습니다. 명시된 중간값은 다음과 같습니다:

경영진은 영업 집행력 강화가 조정 EBIT 및 현금흐름을 뒷받침할 것으로 예상하며, 이는 주로 4분기에 집중된 환율 악재에 의해 일부 상쇄될 것으로 보고 있습니다.

2027년의 경우 경영진은 성장이 프로그램 양산 확대에 더 직접적으로 의존한다는 점에서 산업용 매출에 가장 큰 자신감을 표명했습니다. 회사는 유럽과 아시아 전역의 자동차 생산 및 고객 믹스의 불확실성을 이유로 더 광범위한 2027년 매출 전망은 제시하지 않았습니다.

리스크 및 주요 관전 포인트

• 환율 영향은 특히 2026년 4분기에 계속해서 악재로 작용할 것으로 예상됩니다.
• 유럽과 아시아에서 자동차 시장 상황과 고객 믹스가 가변적으로 유지됨에 따라 2027년 승용차 수요에 대한 가시성이 제한되고 있습니다.
• 경영진은 가솔린 터보 물량 감소의 주요 원인을 중국 내수 시장의 부진으로 돌렸습니다. 매출은 부정적인 관세 전가의 영향도 받았습니다.
• E-쿨링 매출의 시기와 규모는 생산 개시, 시스템 통합 및 고객 채택 여부에 따라 달라집니다.
• HVAC 및 기타 신규 산업용 제품의 마진 확대는 매출 확대 및 늘어난 생산량을 지원하는 데 필요한 생산능력에 따라 결정될 것입니다.

애널리스트 Q&A 주요 내용

경영진은 2027년에 예상되는 약 3억 달러의 산업용 매출도 여전히 대부분 발전기 세트 관련일 것이라고 말했습니다. E-쿨링은 해당 연도 중 본격 가동에 들어갈 예정이지만 초기 매출 기여도는 상대적으로 적을 것으로 예상됩니다.

멀티스택과의 계약은 여러 제품 및 사용 사례를 포함하며, 납품은 2027년에 시작될 예정입니다. 경영진은 채택률과 고객의 생산 계획이 여전히 가변적이라는 점을 들어 계약 규모의 구체적 수치화를 사양했습니다.

개릿 모션은 산업용 매출 비중 확대로 수익성이 개선될 것으로 기대하고 있습니다. 기존의 대형 산업용 터보 프로그램은 이미 갖추어진 생산능력의 수혜를 입고 있으며, HVAC 제품 역시 매력적인 마진을 제공합니다. 다만 회사는 먼저 생산능력에 선별적으로 투자해야 하며, 물량이 확대됨에 따라 보다 명확한 마진 확대가 나타날 것으로 예상됩니다.

중국 시장과 관련해 경영진은 개릿 모션이 중국 수출용 차량에 탑재되는 터보차저를 통해 이미 매출을 올리고 있음을 확인했습니다. 회사는 글로벌 지원 역량을 강점으로 보고 있으나, 중국 완성차 업체의 수출 물량과 프로그램 수명은 빠르게 변할 수 있습니다.

실적 발표 전화회의 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

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.

질의응답

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.