BorgWarner Inc. (NYSE:BWA) Q3 2023 Earnings Call Transcript

Kevin Nowlan: Yes. I mean, I think as we look at where we think the biggest pressure is, most of it is really hitting in the ePropulsion segment. As we look at the battery pack business, for instance, we actually think — continue to see really strong demand there relative to our prior planning assumptions. And it’s really more of a supply-constrained situation there than a demand-constrained situation at the moment. So it does tend to be more in the ePropulsion segment where we’re seeing some of the headwinds.

Noah Kaye: Okay. That’s very helpful. And second, just to touch on your M&A outlook. How does the dynamic that you’re describing today impact your appetite to do further M&A? What is sort of the assumed M&A contribution now to the ’25 outlook? I think at Investor Day, you had indicated there would be some additional M&A to be completed to support the outlook. Do you take a pause there? Do you assess what you have in the current portfolio? Just trying to understand.

Frederic Lissalde: So we will always assess M&A from a technology standpoint. I would say that we are at the verge of closing a transaction that we’ve already announced that will give us even more strength on accessory power electronics. I would say that the current market does not change our appetite on M&A towards E. And I would say the current environment might also help us from a valuation perspective. And we’re always going to stay very opportunistic along those lines but also very, very disciplined as we’ve always been.

Patrick Nolan: Thank you all for your questions today. If you have any additional follow-ups, feel free to reach out to me or any member of my team. With that, Leo, you can conclude today’s call.

Operator: That does conclude the BorgWarner 2023 Third Quarter Results Conference Call. You may now disconnect.