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WABCO Holdings' (WBC) CEO Jacques Esculier on Q1 2016 Results - Earnings Call Transcript

Q1 2016 Earnings Conference Call

April 22, 2016 9:00 am ET


Christian Fife - VP, IR, Treasurer

Jacques Esculier - Chairman, CEO

Prashanth Mahendra-Rajah - CFO


Jerry Revich - Goldman Sachs

Justin Long - Stephens

Jeff Hammond - KeyBanc Capital Markets

Robert Wertheimer - Barclays

Larry De Maria - William Blair

Ross Gilardi - Bank of America

David Leiker - Baird

Neil Frohnapple - Longbow Research


Good morning, and welcome to the WABCO Holdings' First Quarter 2016 Earnings Conference Call. This call is being recorded. There will be a question-and-answer session after the presentation. If you could please limit yourself to one question and, if need be, a short follow-up question so that more participants get a chance to engage with management. Thank you.

At this time for opening remarks and introductions, I would like to turn the call over to Christian Fife, Vice President, Investor Relations and Treasurer. Sir, you may begin your conference.

Christian Fife

Thank you, Candice. Good morning, everyone, and welcome to WABCO's quarterly conference call. Today we'll present our First Quarter 2016 results. And with us we have Jacques Esculier, our Chairman and CEO; and Prashanth Mahendra-Rajah, our CFO. As a reminder, this call, webcast and the presentation that we are using this morning are available on our Web site, under the heading WABCO Q1 2016 results.

A replay of this call will be available through April 29. Also, as shown on chart 2 of the presentation, certain forward-looking statements we will make today are based on management's good faith expectations and beliefs concerning future development. As you know, actual results may differ materially from these expectations as a result of many factors. Examples of these factors can be found in our company's Form 10-Q, which was filed with the SEC this morning, and in our Quarterly Reports.

Lastly, some of our remarks contain non-GAAP financial measures as defined by the SEC. Reconciliation of the non-GAAP measurements to the most comparable GAAP measures are attached as an Appendix to this presentation and to our press release from this morning, both of which are posted on the Web site.

I will now turn the call over to Jacques Esculier.

Jacques Esculier

Thank you, Christian. Good morning, good afternoon to all of you and welcome to our first quarter conference call. The highlight of the quarter, I would say, is a very strong growth of our top-line at 9.7%, of which 1.2% was the result of this acquisition that we announced to you during our last call of this company called MICO, which is a specialist of hydraulic braking systems for off-highway vehicles mostly rooted in North America.

I want to take this opportunity to also remind you that a few days ago, we announced that we have actually acquired another nicely fitting company in the area of aerodynamics that very much complements what we already had built at WABCO, and we'll present more details for you later in the call. So this acquisition of MICO represents 1.2% of the 9.7%, which leaves a healthy 8.5% organic growth in a market that this quarter again has seen a further erosion of 2%. And I'm talking about the number of trucks and buses built worldwide.

The other thing is the market actually is slightly calmer than what we had seen in the previous quarters, even though we had, as you will see later, to downgrade our forecast for the American market because the economic forecast has been further downgraded as well actually in the last six months, whereas we are planning something close to 3% GDP growth in the U.S., we are now closer to 2%. Almost offsetting this, we have upgraded our provision forecast of the engine market that is already benefiting actually from much a stronger GDP growth forecast at 7.5%.