Business Description

Our Company Garrett is a cutting-edge technology leader delivering differentiated solutions for emission reduction and energy efficiency. We design, manufacture and sell highly engineered turbocharging, air and fluid compression, and high-speed electric motor technologies for original equipment manufacturers ("OEMs") and independent aftermarket distributors in the mobility and industrial fields. We have significant expertise in delivering highly engineered products at scale for internal combustion engines ("ICE") using gasoline, diesel, natural gas and hydrogen, as well as zero-emission vehicles ("ZEV"). Our products are key enablers for fuel economy, energy efficiency, thermal management, and compliance with greenhouse gas and other emission-reduction targets. Our growth strategy is two-fold: (i) expand our turbocharger leadership across passenger and commercial vehicles, maritime and industrial applications, as well as the aftermarket, and (ii) apply our differentiated technologies to develop new solutions for traction (E-Powertrain) and thermal management (E-Cooling compressor). The underlying technology pillars, such as high-speed motors, controls software, oil-free foil bearings, power electronics and system integration expertise, are hard to replicate by competitors. These technologies have been developed by Garrett over time and require significant and sustained research, development and engineering ("RD&E") investments. They bring significant benefits in terms of energy efficiency (thereby reducing total cost of ownership), lower weight and compact packaging that are highly valued by our customers. Our Industry Overview We provide cutting-edge technology for the mobility and industrial fields, including light vehicles, commercial vehicles (which includes both on-highway and off-highway applications) and industrial applications. Our solutions include mechanical and electrical products for turbocharging and boosting internal combustion engines, as well as for compressing air and refrigerants for industrial and mobility use (including, but not limited to, use in commercial heating, ventilation and air conditioning ("HVAC") systems, data center cooling and fuel cell systems). As of 2025, our primary source of sales comes from the global turbocharger industry for gasoline, diesel and natural gas engines across light vehicle, on- and off-highway commercial vehicles and industrial applications as well as the aftermarket for these products. Sales also come from E-Boosting and hydrogen fuel cell air compression solutions, already manufactured at scale. At the same time, we have developed unique technological competencies, which we are leveraging to solve our customers’ challenges in the evolution towards hybrids and electric powertrains. We are developing solutions and allocating our RD&E spend accordingly, focusing approximately 50% of total RD&E expenditure in 2025 on Electric Compression and E-Powertrain technologies for both mobile and industrial applications. On the turbocharger side, we continue investing to support our customers, especially for hybrids, while also expanding our portfolio with the development of larger turbochargers, including the new Garrett MEG product line, aimed at marine and industrial applications, including backup power generation for data centers. Key trends affecting our industry Ongoing geopolitical and trade tensions, persistent elevated inflation across Europe, and a slowdown in the growth of China's domestic economy, partially offset by an increase in exports, have continued to exert pressure on global industry and have adversely affected sectors such as automotive throughout 2025. Changes in overall vehicle and machinery production Light vehicle production increased by approximately 4% in 2025, compared to the prior year. Commercial vehicle production experienced an increase of 3% in 2025, with both the on-highway and off-highway segments increasing by roughly 4% and 2%, respectively. For 2026, Standard & Poor Global Mobility ("S&P") expects production volumes to 6 decrease slightly from 2025 in the automotive (light vehicle) industry whereas Knibb Gormezano & Partners Automotive Intelligence ("KGP") expects a slight increase in the commercial vehicle (on-highway and off-highway) industry.…