PHINIA (PHIN) 16th Annual Wells Fargo Industrials & Materials Conference summary

Financial performance and guidance

• Sales guidance for the year is up 1%-7%, reflecting a prudent range due to recent market volatility and FX/tariff impacts.

• Q1 EBITDA margin was 13.1%, typically the lightest quarter, with confidence in stronger margins for the rest of the year.

• Raw material cost increases are minimal, less than 1% of total material cost, and are offset by cost reductions and pass-through mechanisms.

• Margin targets are 14%-15% by decade end, driven by incremental growth and portfolio shifts.

• Tariff impacts are largely passed through to customers, with some tailwind expected in aftermarket.

Growth strategy and market positioning

• Targeting 2%-4% organic growth through 2030, outpacing core markets due to share gains and portfolio expansion.

• Aftermarket and off-highway/industrial segments are growing faster, with off-highway rising from 4% to 6% of revenues between 2024 and 2025.

• Market share in injection systems has moved from low to mid-teens, with top three players dominating as smaller competitors exit.

• Customers are diversifying suppliers due to competitors’ reduced combustion focus and lack of post-2030 commitments.

• Diesel business has stabilized after years of decline, now flat and potentially returning to growth.

Portfolio evolution and M&A

• Portfolio is shifting toward commercial, aftermarket, and off-highway, with light passenger vehicle share expected to fall below 20%.

• $5 billion revenue target includes potential M&A, focused on non-auto assets with strong margins and cash flow.

• Recent acquisitions prioritize synergy, margin, and EPS accretion; buybacks remain a priority if share price is attractive.

• Over 23% of shares have been repurchased since the spin-off, with dividends and organic growth also prioritized.