BorgWarner (BWA) Barclays 43rd Annual Industrial Select Conference summary

2025 performance highlights

• Achieved record free cash flow of $1.2 billion, with adjusted operating margins up 60 basis points and EPS up 14%.

• Secured 30 new business wins across both foundational and eProduct portfolios, including a major turbine generator supply agreement with $300 million initial revenue expected next year.

• Returned over 50% of free cash flow to shareholders via dividends and buybacks, and will continue this approach.

• Focused on financial discipline, cost structure adjustments, and supply chain productivity to support further margin expansion in 2026.

• Exploring inorganic growth opportunities that leverage core competencies and expand earnings.

Strategic and organizational shifts

• Shifted from a primary focus on eProducts to unlocking growth across all business segments, encouraging each to pursue top-line growth opportunities.

• Adjusted strategy 18 months ago in response to slower-than-expected EV adoption, especially outside China.

• Foundational business is benefiting from OEMs extending combustion engine lifecycles and introducing new engines, leading to new and conquest business wins.

• Leveraging core strengths in turbochargers and drivetrain solutions to win across both foundational and hybrid markets.

Power generation and turbine generator opportunity

• Developed a turbine generator in partnership with Endeavour, targeting data centers and other scalable power needs, with 65% of content developed in-house.

• Product offers flexibility (1 MW and up), rapid startup, multi-fuel capability, and can serve as both backup and primary power.

• No direct competitor for this solution; offers advantages in scalability, cost, and resilience compared to traditional power gen players.

• Initial $300 million revenue expected next year, with global demand prompting consideration of capacity expansion beyond 2 GW.

• BorgWarner provides the technology and service, while Endeavour handles customer interface and installation.