BorgWarner’s Chief Financial Officer, Kevin Nowlan, expressed confidence in the company’s ability to achieve strong organic growth and improved profitability in its e-products. He emphasized the utilization of top-line growth to drive this progress and highlighted the commitment to investing in the long-term profitable growth of the e-product portfolio during an investor call on Wednesday.
This quarter, BorgWarner witnessed a significant increase in net expenses related to mergers, acquisitions, and divestitures. These expenses rose by $47 million, reaching $56 million. Notably, the company recently completed the spinoff of the fuel systems and aftermarket segments into a publicly traded company called Phinia. Phinia specializes in gasoline and alternative fuels.
BorgWarner has made several notable acquisitions, including Santroll’s eMotor business for light vehicles, Rhombus Energy Solutions, Drivetek, and SSE. In addition, the supplier announced its intention to acquire a manufacturer of EV charging components from Eldor, an Italian electronics supplier, for approximately $80 million.
The company experienced a 39% decline in free cash flow, amounting to $38 million. This decline was attributed to an $88 million increase in capital expenditures and tooling outlays.
All of BorgWarner’s business units witnessed growth in net sales over the quarter. The air management system unit recorded a 17.6% increase in revenue, amounting to approximately $2 billion. Drivetrain revenue rose by 24.8% to around $1.1 billion, while E-Propulsion revenue experienced a substantial increase of 31%, reaching $567 million.
As part of its transition to electrification, BorgWarner announced three new partnerships. These include the supply of integrated drive modules for a Chinese automaker and the provision of an EV platform for an Asian automaker. The specific automakers were not disclosed by BorgWarner CEO Fred Lissalde.
Shares of BorgWarner declined by 7.5%, settling at $42.99 during midday trading on Wednesday.
According to the Automotive News list of the top 100 global suppliers, BorgWarner ranks 18th, with sales to automakers amounting to $14.5 billion in 2022.
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
