Garrett Motion (GTX) Q4 2024 earnings summary

Executive summary

• 2024 net sales were $3,475M, down 11% year-over-year, with Q4 net sales at $844M, but margins and cash flow improved due to cost productivity and commodity deflation.

• Adjusted EBITDA reached $153M in Q4 (18.1% margin) and $598M for FY 2024 (17.2% margin), with operational performance offsetting volume and FX headwinds.

• Net income for 2024 was $282M (8.1% margin), with Q4 net income at $100M (11.8% margin), both up significantly year-over-year.

• Maintained high business win rates, expanded in turbo and electrification, secured new awards in China and industrial applications, and strengthened leadership in zero-emission tech.

• Returned 82% of adjusted free cash flow to shareholders, repurchasing $296M of shares (13% reduction), and announced a new $250M repurchase and $50M dividend for 2025.

Financial highlights

• Q4 2024 net income was $100M, up from $52M in Q4 2023; FY 2024 net income was $282M, up from $261M in FY 2023.

• Q4 adjusted EBITDA increased to $153M (18.1% margin), and full-year adjusted EBITDA was $598M (17.2% margin), with adjusted free cash flow of $157M in Q4 and $358M for FY 2024 (60% conversion rate).

• Gross profit for FY 2024 was $705M, with Q4 gross profit margin at 21.6%.

• Ended 2024 with $725M liquidity, $125M in cash, and reduced total debt by $203M to $1,493M; net leverage ratio at 2.21x.

• Interest expense in Q4 2024 dropped to $26M from $55M year-over-year.

Outlook and guidance

• 2025 net sales expected between $3.3B and $3.5B, with constant currency growth of -3% to +2%.

• 2025 adjusted EBITDA guidance is $545M to $605M, margin expected to remain above 17% excluding FX; net income projected at $209M to $254M; adjusted free cash flow $300M to $390M.

• Board authorized up to $250M in share repurchases and a $50M annual dividend for 2025, with plans to return at least 75% of adjusted free cash flow to shareholders.

• R&D spending to rise to 4.6% of sales, with over 50% dedicated to zero-emission technologies.

• 2025 light vehicle production expected flat to down 3%; commercial vehicle industry flat to up 2%.