BorgWarner (BWA) 16th Annual Wells Fargo Industrials & Materials Conference summary

Financial performance and outlook

• Full-year sales guidance reaffirmed at $14.15 billion midpoint, with Q1 revenue of $3.53 billion and margins up 50 basis points, tracking well to guidance.

• Market production assumptions remain flat to down 3%, in line with S&P's 2% decline; Q1 and Q2 revenue holding up well.

• Organic growth in Q1 was in line with market after adjusting for battery, with regional puts and takes; annualized revenue aligns with guidance.

• Core auto business expected to see step-function growth in 2027–2029 as new program wins launch and volumes ramp up.

• Light vehicle e-products grew 31% last year, converting at mid-teens margins; 10% growth expected this year with continued focus on profitability.

Data center and industrial diversification

• Strategic pivot into data centers with three main products: turbine generators, battery storage, and microgrid inverters, leveraging automotive technology and scale.

• Turbine generator developed with Endeavour, exclusive for 350 kW systems, targeting flexible, scalable solutions for hyperscalers; initial launch expected in 2027, primarily for primary power.

• Battery storage leverages AKASOL acquisition and existing capacity, focusing on custom-tailored solutions for industrial/data center use; production expected by next year.

• Microgrid inverters capitalize on shift to 800-volt systems, with strong feedback from initial customers and production targeted for 2027.

Competitive positioning and market opportunity

• Turbine generator offers lower emissions, faster deployment, and flexibility compared to large incumbents like Siemens, GE, and Caterpillar.

• Battery storage targets niche, application-specific markets rather than large grid-scale projects, emphasizing speed to market.

• Microgrid inverter opportunity driven by 800-volt transition, with significant TAM in data centers and other industrial applications.

• Strong position in China due to long-standing relationships, speed, and local assets; winning new business with leading OEMs.