BorgWarner Inc. (BWA) expects a compound annual growth rate of 10% to 12% from 2014 to 2017, attributed to solid organic business growth, according to President/CEO James R. Verrier. He was speaking at Baird’s 2014 Industrial Conference, held at the Four Seasons Hotel in Chicago, Illinois.
BorgWarner manufactures highly engineered engines, drivetrain components and systems for vehicle powertrain applications. The components are designed to improve fuel efficiency, emissions and performance. The company has 43 locations in 14 countries, with most of the world’s big auto manufacturers as customers.
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Verrier said the company has a three-year backlog of new business. He expects net new business-related revenue within a range of $850 million to $950 million in 2015, $1 billion to $1.2 billion in 2016, and $1 billion to $1.2 billion in 2017.
Organic growth includes the change in sales due to net new business and excludes the impact of base business growth or shrinkage, or changes in product pricing, acquisitions, divestitures and foreign currencies.
“There’s increasing global demand aimed at improving fuel economy,” Verrier said, adding that the company’s products should be “adopted quickly in light and commercial vehicle markets.”
Approximately 70% of the total three-year net new business is anticipated to come from engine-related products such as turbochargers, ignition systems, emissions products, engine timing systems and thermal systems. The remaining 30% is expected from drivetrain-related products, including all-wheel drive systems, the company’s DualTronic transmission technology, and traditional automatic transmission products.
New business in Asia is expected to account for 55% of the total new business over the three-year period, Verrier said. North and South America account for 30%, with 25% of that total in North America. Europe is anticipated to be about 15% of the new business, down from 27% in the last three-year period.
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