BorgWarner Inc. (NYSE:BWA) Q4 2019 Earnings Conference Call - Final Transcript

Feb 13, 2020 • 09:30 am ET


BorgWarner Inc. (NYSE:BWA) Q4 2019 Earnings Conference Call - Final Transcript


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Good morning, my name is Sharon and I will be your conference facilitator. At this time, I would like to welcome everyone to the BorgWarner 2019 Fourth Quarter and Full Year Results Conference Call. [Operator Instructions]

I would now like to turn the call over to Patrick Nolan, Vice President of Investor Relations. Mr. Nolan, you may begin your conference.

Patrick Nolan

Thank you, Sharon. Good morning, everyone, and thank you for joining us today. We issued our earnings release earlier this morning. It's posted on our website, on our homepage and on our Investor Relations homepage. With regard to our Investor Relations calendar, we will be attending multiple conferences between now and our next earnings release. Please see the Events section of our Investor Relations homepage for a full list.

Before we begin, I need to inform you that during this call we may make forward-looking statements, which involve risks and uncertainties detailed in our 10-K. Our actual results may differ significantly from the matters discussed today.

During today's presentation, we will highlight certain non-GAAP measures in order to provide a clearer picture of how the core business performed and for comparison purposes with prior periods. When you hear us say, "On a comparable basis", that means excluding the impact of FX, net M&A and other non-comparable items. When you hear us say, "Adjusted", that means excluding non-comparable items. When you hear us say, "Organic", that means excluding the impact of FX and net M&A. We will also refer to our growth compared to our market. When you hear us say "Market", that means the change in light vehicle production we did for our geographic exposure.

Our growth is defined as our organic revenue change versus the market. Please note that we have posted our earnings call presentation to the IR page of our website. We encourage you to follow along with the slides during our discussion.

With that, I'm happy to turn the call over to Fred.

Frederic B. Lissalde

Thank you, Pat, and good morning, everyone. We're very pleased to share our results for 2019 this morning and provide an overall company update. Let me start with the highlights of the quarter on Slide 5. I am pleased with our stronger than expected topline and margin performance for the year, driven by the fourth quarter performance. With approximately $10.2 billion in sales, we are up about 0.7% organically. This compares to our market being down approximately 4.6%. So, our outgrowth was 530 basis points for the year, which was ahead of our expectations going into the fourth quarter, driven by stronger than expected revenue trends in China and Europe.

For the full year, we saw our growth in all major regions. We delivered high single-digit outgrowth in Europe and China. Our North American outgrowth was in the mid-single digit range. 2019 earnings per share came at $4.13, ahead of our guidance, driven by the fourth quarter upside.

We delivered strong free cash of about $700 million for the year and we expect