What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-04 compared with 2026-05-05 · 232 added, 295 removed, 186 unchanged (74% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis of financial condition and results of operations (“MD&A”) is intended to help you understand the business operations and financial condition of Versigent PLC (“Versigent”) for the three months ended March 31, 2026.

This discussion should be read in conjunction with Item 1.

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• Off-Balance Sheet Arrangements

• Significant Accounting Policies and Critical Accounting Estimates

• Critical Accounting Estimates

• Recently Issued Accounting Pronouncements

Within this MD&A, “Versigent,” the “Company,” “we,” “us” and “our” refer to Versigent PLC.

“Aptiv” or “Parent” refers to Aptiv PLC.

The Company’s ordinary shares are publicly traded on the New York Stock Exchange (“NYSE”) under the symbol “VGNT.”

“Aptiv” or “Former Parent” refers to Aptiv PLC.

The Company’s ordinary shares are publicly traded on the New York Stock Exchange (“NYSE”) under the trading symbol “VGNT.”

Spin-Off from Aptiv

On January 22, 2025, Aptiv PLC (“Aptiv” or the “Parent”) announced its intention to separate its Electrical Distribution Systems business by means of a Spin-Off (the “Separation” or “Spin-Off”).

On April 1, 2026 (the “Distribution Date”), the Spin-Off, which created Versigent PLC (“Versigent,” the “Company,” “we,” “us” or “our”), was completed in the form of a distribution of all of the ordinary shares of Versigent to holders of Aptiv’s ordinary shares on a pro rata basis.

Each holder of record of Aptiv ordinary shares received one of our ordinary shares for every three Aptiv ordinary shares held on March 17, 2026 (the “Record Date”).

On January 22, 2025, Aptiv announced its intention to separate its Electrical Distribution Systems business by means of a Spin-Off (the “Separation” or “Spin-Off”).

On April 1, 2026 (the “Distribution Date”), the Spin-Off, which created Versigent PLC, was completed in the form of a distribution of all of the ordinary shares of Versigent to holders of Aptiv’s ordinary shares on a pro rata basis.

Each holder of record of Aptiv ordinary shares received one Versigent ordinary share for every three Aptiv ordinary shares held on March 17, 2026 (the “Record Date”).

In lieu of fractional shares of Versigent, stockholders of the Company received cash.

As a result of these transactions, all of the assets, liabilities, and legal entities comprising Aptiv’s Electrical Distribution Systems business are now owned directly, or indirectly through its subsidiaries, by Versigent.

Versigent is an independent public company trading under the symbol “VGNT” on the New York Stock Exchange.

As part of the Spin-Off, we entered into a number of agreements with the Parent to govern the Separation and our relationship with the Parent following the Separation, including a Separation and Distribution Agreement, Transition Services Agreement, supply agreements, Tax Matters Agreement and Employee Matters Agreement.

As part of the Spin-Off, we entered into a number of agreements with Aptiv to govern the Separation and our relationship with the Former Parent following the Separation, including a Separation and Distribution Agreement, Transition Services Agreement, supply agreements, Tax Matters Agreement and Employee Matters Agreement.

Refer to the Company’s Information Statement furnished with the Company’s Registration Statement on Form 10-12B/A filed on March 6, 2026 for a description of the material terms of these agreements.

These agreements provided for the allocation between Versigent and Aptiv of the Parent’s assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after the Separation and govern certain relationships between the Company and Parent after the Spin-Off.

These agreements provided for the allocation between Versigent and the Former Parent’s assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after the Separation and govern certain relationships between the Company and Former Parent after the Spin-Off.

Basis of Presentation

Versigent’s historical combined financial statements have been prepared on a carve-out basis and are derived from Aptiv’s consolidated financial statements and accounting records.

Therefore, these financial statements reflect, in conformity with U.S.

GAAP, Versigent’s combined financial position, results of operations and cash flows as the business was historically operated as part of Aptiv prior to the Spin-Off.

These financial statements may not be indicative of Versigent’s future performance and do not necessarily reflect what Versigent’s combined financial position, results of operations and cash flows would have been had Versigent operated as a separate, publicly traded company during the periods presented, particularly because the Company expects that changes will occur in our operating structure and its capitalization as a result of the Separation from Aptiv.

Versigent’s combined statements of operations include its direct expenses for cost of goods sold, research and development, sales and marketing, distribution, and administration as well as allocations of certain general, administrative, sales and marketing expenses and cost of sales provided by Aptiv to Versigent and allocations of related assets, liabilities, and Parent’s investment, as applicable.

The allocations have been determined on a reasonable basis;

however, the amounts are not necessarily representative of the amounts that would have been reflected in the financial statements had the Company been an entity that operated independently of the Parent.

Related party allocations are further described in Note 3.

Related-Party

Transactions to the audited combined financial statements.

Aptiv will continue to provide some of the services related to these general and administrative functions on a transitional basis for a fee following the Spin-Off.

Prior to the Spin-Off on April 1, 2026, the historical financial statements of Versigent were prepared on a stand-alone combined basis and were derived from the Former Parent’s consolidated financial statements and accounting records as if the Electrical Distribution Systems segment of the Former Parent had been part of Versigent for all periods presented.

Accordingly, for periods presented prior to April 1, 2026, our financial statements are presented on a combined basis and the periods subsequent to April 1, 2026 are presented on a consolidated basis (all periods hereinafter are referred to as the “consolidated financial statements”).

The unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S.

The Company’s historical financial statements for periods prior to the Spin-Off reflect an allocation of expenses related to certain corporate functions of the Former Parent, including senior management, legal, human resources, finance and accounting, treasury, information technology services and support, cash management, payroll processing, pension and benefit administration and other shared services.

These costs were allocated using methodologies that management believes were reasonable for the item being allocated.

Allocation methodologies included direct usage when identifiable, as well as the Company’s relative share of revenues, headcount or functional spend as a percentage of the total.

However, the allocations are not indicative of the actual expenses that would have been incurred had the Company operated as a stand-alone publicly-traded company for the periods presented.

Former Parent allocations are further described in Note 3.

Related-Party Transactions to the consolidated financial statements.

For periods prior to April 1, 2026, the consolidated financial statements principally represent the historical results of operations and assets and liabilities of the Former Parent’s Electrical Distribution Systems segment.

They may not be indicative of Versigent’s future performance and do not necessarily reflect what Versigent’s consolidated results of operations, financial condition and cash flows would have been had Versigent operated as a separate, publicly traded company during the periods presented.

Executive Overview

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Automotive sales depend on a number of factors, including global and regional economic conditions.

Global vehicle production increased 4% from 2024 to 2025, reflecting increased production of 10% in China and 1% in South America, our smallest region, partially offset by declines of 2% in North America and 1% in Europe.

Global vehicle production increased approximately 4% from 2024 to 2025, reflecting 10% growth in China and 1% in South America, partially offset by declines of 2% in North America and 1% in Europe.

Refer to Note 20.

Segment Reporting and Revenue for financial information concerning principal geographic areas.

Economic volatility or weakness in North America, Europe, Asia Pacific or, to a lesser extent, South America, could result in a significant reduction in automotive sales and production by our customers, which would have an adverse effect on our business, results of operations and financial condition.

Global inflationary pressures have, at times, both reduced consumer demand for automotive vehicles and increased the price of inputs to our products, which has adversely impacted our sales and profitability, and this trend has continued in 2026.

There is also potential that geopolitical factors could adversely impact the United States and other economies, and specifically the automotive sector.

In particular, changes to international trade agreements, such as the United States-Mexico-Canada Agreement (the “USMCA”), increases in trade tariffs, import quotas and other trade restrictions or actions, including retaliatory responses to such actions, or other political pressures have affected and could continue to affect our operations and the operations of our OEM customers, resulting in reduced automotive production in certain regions or shifts in the mix of production to higher cost regions.

Increases in interest rates could also negatively impact automotive production as a result of increased consumer borrowing costs or reduced credit availability.

Additionally, economic weakness may result in shifts in the mix of future automotive sales (from vehicles with more content such as luxury vehicles, trucks and sport utility vehicles toward smaller passenger cars).

While our diversified customer and geographic revenue base, along with our flexible cost structure, have well positioned us to withstand the impact of industry downturns and benefit from industry upturns, shifts in the mix of global automotive production to higher cost regions or to vehicles with less content could adversely impact our profitability.

Ukraine/Russia conflict.

The conflict between Ukraine and Russia, which began in February 2022, has had, and is expected to continue to have, negative economic impacts to both countries and to the European and global economies.

In response to the conflict, the E.U., the United States and other governments implemented broad economic sanctions against Russia.

These countries may impose further sanctions and take other actions as the situation continues.

Ukraine and Russia are significant global producers of raw materials used in our supply chain, including copper, aluminum, palladium and neon gases.

Disruptions in the supply and volatility in the price of these materials and other inputs produced by Ukraine or Russia, including increased logistics costs and longer transit times, could adversely impact our business and results of operations.

The conflict has also increased the possibility of cyberattacks occurring, which could either directly or indirectly impact our operations.

Furthermore, the conflict has caused our customers to analyze their continued presence in the region and future customer production plans in the region remain uncertain.

We do not have a material physical presence in Ukraine, with less than 1% of our workforce located in the country as of December 31, 2025 and less than 1% of our net sales for the year ended December 31, 2025 generated from manufacturing facilities in Ukraine.

However, the impacts of the conflict have adversely impacted, and may continue to adversely impact, global economies, and in particular, the European economy, a region which accounted for approximately 24% of our net sales for the year ended December 31, 2025.

We continue to monitor the situation and will seek to minimize its impact to our business, while prioritizing the safety and well-being of our employees located in Ukraine and our compliance with applicable laws and regulations in the locations where we operate.

Any of the impacts mentioned above, among others, could adversely affect our business, business opportunities, results of operations, financial condition and cash flows.

Changes in trade policies, tariffs, and other geopolitical factors have affected and could continue to affect our operations and those of our OEM customers, potentially resulting in lower production volumes or shifts to higher-cost regions.

Rising interest rates may also reduce vehicle demand through higher borrowing costs and tighter credit availability.

Economic weakness may shift sales toward vehicles with lower content, which could adversely affect our profitability.

Although our diversified footprint and flexible cost structure provide resilience, shifts in regional production or vehicle mix may negatively impact margins.

Global supply chain disruptions.

Global supply chain disruptions have in the past and could in the future lead to interruptions in our production, which could impact our ability to fully meet the vehicle production demands of OEMs at times due to events which are outside our control.

For example, as a result of the rapidly evolving trade policies and tariff actions, the uncertainty in the automotive industry has increased, which could adversely affect our business and financial results.

We will continue to actively monitor our global supply chain and will seek to aggressively mitigate and minimize the impact of any future disruptions on our business.

In addition, we are carrying critical inventory items and key components, and we continue to procure productive, raw material and non-critical inventory components in order to satisfy our customers’ vehicle production schedules.

As of March 31, 2026 and December 31, 2025, we have not experienced any significant shortages of raw materials, however, as a result of our customers’ recent production volatility and cancellations, our balance of productive, raw and component material inventories has increased substantially from customary levels.

These changes to the production environment were primarily driven by the global supply chain disruptions that impacted the automotive industry at times during previous years.

We continue to actively monitor and manage inventory levels across all inventory types in order to maximize both supply continuity and the efficient use of working capital.

Normally we do not carry inventories of such raw materials in excess of those reasonably required to meet our production and shipping schedules.

Global supply chain disruptions have caused, and may continue to cause, production interruptions that affect our ability to meet OEM demand.

Uncertainty driven by evolving trade policies has also increased volatility across the industry.

In addition, we continue to manage inventory levels to support customers’ vehicle production schedules.

As of June 30, 2026 and December 31, 2025, we have not experienced significant raw material shortages;

however, inventory levels have remained elevated due to recent OEM production volatility and cancellations.

We are actively managing inventory to balance supply continuity and working capital efficiency.

Key growth markets .

We believe our strong global presence has positioned us to generate strong growth rates over the long-term.

We continue to expand our established presence in key growth markets, positioning us to benefit from the expected long-term growth opportunities in these regions.

We are capitalizing on our long-standing relationships with the global OEMs and further enhancing our positions with the key growth market OEMs to continue expanding our worldwide leadership.

We continue to build upon our extensive geographic reach to capitalize on fast-growing automotive markets.

We believe that our presence in best cost countries positions us to realize incremental margin improvements as the global balance of automotive production shifts towards the key growth markets.

We have a strong local presence in China, including a major manufacturing base and well-established customer relationships.

There have been periods of increased market volatility and moderation in the level of economic growth in China, which resulted in periods of lower automotive production growth rates in China than those previously experienced.

Automotive production in China experienced growth of 10% in 2025, which follows growth of 4% in 2024.

Despite the market volatility and moderation in the level of economic growth in China, rising income levels in China and other key growth markets are expected to result in stronger growth rates in these markets over the long-term.

Our business in China remains sensitive to economic and market conditions that impact automotive sales volumes in China and may be affected if the pace of growth slows as the Chinese market matures or if there are reductions in vehicle demand in China.

Our business in China may also be impacted by the expanding market share of domestic Chinese OEMs in the China market, which has led to declines in revenue and market share of non-Chinese OEMs, resulting in certain traditional OEMs taking steps to reduce or restructure their operations in China.

However, we continue to believe this market will benefit from long-term demand for new vehicles and stringent governmental regulation driving increased vehicle content, including accelerated demand for electrified vehicles.

We believe our global presence positions us to benefit from long-term growth in key markets.

We continue to expand relationships with global and regional OEMs and leverage our footprint in best cost countries to support growth and margin improvement.

We maintain a strong presence in China, where automotive production grew 10% in 2025 following growth of 4% in 2024.

While growth has moderated and market dynamics have become more volatile, long-term demand is supported by rising income levels and regulatory-driven content increases.

Our China operations remain sensitive to economic conditions and increasing market share of domestic OEMs, which has pressured non-Chinese OEM production.

Despite these dynamics, we expect continued long-term demand, including growth in electrified vehicles.

Market driven products .

Our extensive portfolio of advanced technologies and optimized solutions for signal, power and data distribution satisfy the OEM’s needs to meet increasingly stringent government regulations and meet consumer preferences for increased vehicle content and technology.

Our comprehensive portfolio of LV and HV signal, power and data distribution and charging solutions is expected to further benefit from long-term secular industry megatrends of increasing vehicle electrification and feature and content growth.

We are committed to continuing to invest in products, solutions and capabilities

that solve our customers’ biggest challenges.

We expect our investment in new technologies to accelerate our diversification and penetration into non-automotive markets.

Key focus areas for future innovation include new cable and harness technologies and solutions, and design and assembly automation that enable the continued development of electrified, software-defined vehicles.

Our focus on and investments in developing and acquiring new, innovative technologies will support future growth as well as further diversification across customers and end markets.

While we have identified high voltage electrification systems as a key product market, certain of our OEM customers have recently announced delays in their electric vehicle investment strategies amidst reduced expectations for future consumer demand for these products, particularly in North America.

Our advanced portfolio of LV and HV signal, power and data distribution and charging solutions enables OEMs to meet increasingly stringent regulatory requirements and growing demand for vehicle content and technology.

We expect to benefit from long-term industry trends, including electrification and increased vehicle complexity, and are investing in technologies that address our customers’ evolving needs while supporting diversification into adjacent markets.

Key innovation priorities include cable and harness technologies and design and assembly automation for electrified, software-defined vehicles.

While high-voltage electrification remains a key focus, some OEMs have recently delayed certain EV investments amid softer demand expectations, particularly in North America.

Global capabilities and risks .

Many OEMs are continuing to develop vehicle platforms intended to increase standardization, reduce per-unit cost and increase capital efficiency and profitability.

In addition, geopolitical tensions are also forcing them to regionalize their supply chain.

As a result, OEMs prefer suppliers that have the capability to manufacture products on a global basis with manufacturing and design flexibility to adapt to regional variations.

Suppliers with global scale and strong design, engineering and manufacturing capabilities, are best positioned to benefit from this trend.

Our global manufacturing footprint enables us to efficiently manufacture in and supply from best cost countries at scale.

Our regional teams allow us to stay connected to local market requirements and more closely partner with our customers during all phases of the development process, from design through production, while maintaining focus on increasing efficiency and lowering costs.

Increasing manufacturing automation, footprint rotation to best cost countries, and other operational initiatives have supported our commitment to continuous improvement, leveraging scale and enhancing efficiency to improve our margins.

Our operations are subject to certain risks inherent in doing business globally, including military conflicts in regions in which we operate, changes in laws or regulations governing labor, trade, or other monetary or tax fiscal policy changes, including the Organisation for Economic Co-operation and Development (“OECD”) Pillar Two Framework (the “Framework”), tariffs, quotas, customs and other import or export restrictions or trade barriers.

Existing free trade laws and regulations, such as the USMCA, provide certain beneficial duties and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other requirements.

Changes in laws or policies governing the terms of trade, and in particular increased trade restrictions, tariffs, taxes or non-tariff barriers on imports from countries where we manufacture products, such as China and Mexico, could have a material adverse effect on our business and financial results.

For example, on April 2, 2025, the United States government announced tariffs of at least 10% across imported goods from certain countries, with rates even higher for goods from countries with a high trade deficit with the United States.

Subsequent to this announcement, a number of other countries announced tariffs on U.S.

goods and/or have negotiated or continue to negotiate trade agreements with the United States.

On February 20, 2026, the U.S.

Supreme Court issued a ruling regarding certain tariffs imposed under the International Economic Powers Act (“IEEPA”), invalidating many of the tariffs imposed on U.S.

imports in 2025 discussed above.

While the impacts to the Company resulting from these incremental tariffs were not significant during the three months ended March 31, 2026, the future impact of any announced tariffs is subject to a number of factors, including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any retaliatory responses to such actions that the target countries may take and any mitigating actions that may become available.

Despite recent trade negotiations and the potential for trade agreements between the United States and the Mexican, Canadian and Chinese governments, given the uncertainty regarding the scope and duration of any new tariffs and any associated retaliatory measures, as well as the potential for additional tariffs or trade barriers by the United States, Mexico, Canada, China or other countries, we can provide no assurance that any strategies we implement to mitigate the impact of such tariffs or other trade actions will be successful.

Management continues to monitor the volatile geopolitical environment to identify, quantify and assess proposed or threatened duties, taxes or other business restrictions which could adversely affect our business and financial results.

In addition, effective January 1, 2025, the government of Mexico implemented country-wide statutory minimum wage increases of 12%.

The government of Mexico has also indicated it may implement other labor reforms, such as an initiative to shorten the work week from 48 to 40 hours.

While management has implemented measures to mitigate the impact of these labor reforms on our cost structure, we cannot predict the ultimate future impact on our business.

The outbreak of armed conflicts in the Middle East beginning in October 2023 and including the 2026 Iran conflict has also created numerous uncertainties, including the risk that the conflicts spread throughout the broader region, and their impact on the global economy, fuel prices and supply chains.

In addition, as described above, the conflict between Ukraine and Russia has also created numerous economic uncertainties, including the potential for further sanctions against Russia, the impact on the global supply chain for raw materials produced in each country, as well as increased logistics costs and transit times, and the actions of automotive OEMs and suppliers as they relate to production plans in each country and within the region.

We are also subject to risks associated with actions taken by governmental authorities to impose changes in laws or regulations that restrict certain business operations, trade or travel in response to a pandemic or widespread outbreak of an illness.

The impacts of any of these factors mentioned above, among others, could adversely affect our business, business opportunities, results of operations, financial condition and cash flows.

Product development .

The automotive technology and components industry is highly competitive and is characterized by rapidly changing technology, evolving industry standards and changes in customer needs.

Our ability to anticipate changes in technology and regulatory standards and to successfully develop and introduce new and enhanced products on a timely and cost competitive basis will be a significant factor in our ability to remain competitive.

To compete effectively in the automotive technology and components industry, we must be able to develop and launch new products to meet our customers’ demands in a timely manner.

With our innovative technologies and robust global engineering and development capabilities we are well positioned to meet the increasingly stringent vehicle manufacturer demands and consumer preferences for high-technology content in automobiles.

OEMs are increasingly looking to their suppliers to simplify vehicle design and assembly processes to reduce costs.

As a result, OEMs prefer suppliers that have the capability to manufacture products on a global basis with manufacturing automation and design flexibility to adapt to regional variations.

Designing electrical architectures for increased automation requires innovative approaches and greater collaboration with OEMs;

given our engineering expertise and strong customer relationships, we believe we are well positioned to drive the transition to higher levels of automation.

Suppliers that can provide fully engineered solutions, such as our Company, are positioned to leverage the trend toward system sourcing from global suppliers.

OEMs are increasingly standardizing platforms and regionalizing supply chains, favoring suppliers with global scale and flexible manufacturing capabilities.

Our global footprint enables efficient production in best cost regions while supporting localized customer requirements.

Our operations are subject to risks associated with global business activities, including changes in trade policies, tariffs, tax regimes (including the Organisation for Economic Co-operation and Development (“OECD”) Pillar Two framework), labor regulations, and geopolitical conflicts.

Changes to trade laws or increased restrictions on imports from key manufacturing regions could adversely affect our business.

While the impacts to the Company resulting from incremental tariffs have had limited impact to date, the future impact of any announced tariffs is subject to a number of factors, including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any retaliatory responses to such actions that the target countries may take and any mitigating actions that may become available.

We continue to monitor developments and implement mitigation strategies;

however, their effectiveness cannot be assured.

Labor cost increases and potential regulatory reforms may increase operating costs.

In addition, global conflicts and geopolitical tensions may disrupt supply chains, increase logistics costs, and impact demand.

Engineering, design and development .

Our history and culture of innovation have enabled us to develop significant intellectual property and design and development expertise to provide advanced technology solutions that meet the demands of our customers.

We have a team of approximately 8,000 scientists, engineers and technicians focused on innovating and developing leading product solutions for our key markets, located at six technical centers in China, Germany, Mexico, Poland and the United States.

Our total investment in research and development, including engineering, was approximately $332 million for the year ended December 31, 2025, which includes approximately $58 million of co-investment by customers and government agencies.

Each year we share some engineering expenses with OEMs and government agencies which generally range from 15% to 20% of engineering expenses.

This level of co-investment supports product development, accelerates the pace of innovation and reduces the risk associated with successful commercialization of technological breakthroughs.

We collaborate with OEMs, government agencies, and industry partners, with customers typically co-investing in engineering expenditures.

Customer co-investment supports product development, accelerates the pace of innovation and reduces the risk associated with successful commercialization of technological breakthroughs.

We also encourage “open innovation” and collaborate extensively with peers in the industry, government agencies and academic institutions.

In the past, suppliers often incurred the initial cost of engineering, designing and developing automotive component parts, and recovered their investments over time by including a cost recovery component in the price of each part based on expected volumes.

Recently, we and many other suppliers have negotiated for cost recovery payments independent of volumes.

This trend reduces our economic risk.

We believe that our engineering and technical expertise, together with our emphasis on continuing research and development, allows us to use the latest technologies, materials and processes to solve problems for our customers and to bring new, innovative solutions to market.

We believe that continued engineering activities are critical to maintaining our pipeline of technologically advanced solutions.

Given our strong financial discipline, we seek to effectively manage fixed costs and efficiently rationalize capital spending by critically evaluating the profit potential of new and existing customer programs, including investment in innovation and technology.

We maintain our engineering activities around our focused product portfolio and allocate our capital and resources to those products with distinctive technologies.

We expect expenditures for research and development activities, including engineering, net of co-investment, to be approximately $305 million for the year ended December 31, 2026.

We maintain a portfolio of approximately 700 patents and protective rights in the operation of our business as of December 31, 2025.

While no individual patent or group of patents, taken alone, is considered material to our business, taken in the aggregate, these patents provide meaningful protection for our products and technical innovations.

Similarly, while our trademarks are important to identify our position in the industry, we do not believe that any of these are individually material to our business.

Cost-cutting initiatives adopted by our customers result in increased downward pressure on pricing.

Our customer supply agreements generally require step-downs in component pricing over the periods of production and OEMs have historically possessed significant leverage over their outside suppliers because the automotive component supply industry is fragmented and serves a limited number of automotive OEMs.

Our profitability depends in part on our ability to generate sufficient production cost savings in the future to offset price reductions.

In addition, during recent years, global economies and our industry were subjected to significant inflationary cost pressures, and we continue to face additional potential impacts from the rapidly evolving trade policies and tariff actions.

We continue to work with our customers, both through price recoveries and adjustments as well as future pricing adjustments as contracts renew, to mitigate the impact of these inflationary pressures on our results of operations.

We are focused on maintaining a low fixed cost structure that provides us flexibility to remain profitable at all points of the traditional vehicle industry production cycle.

As a result, substantially all of our hourly workforce is located in best cost countries.

Furthermore, we have considerable operational flexibility by leveraging a large workforce of contingent workers,

which represented approximately 33% of the hourly workforce as of March 31, 2026.

However, we will continue to adjust our cost structure and optimize our manufacturing footprint in response to changes in the global and regional automotive markets and in order to increase investment in advanced technologies and engineering, as evidenced by our ongoing restructuring programs focused on reducing our global overhead costs, the continued rotation of our manufacturing footprint to best cost locations in Europe and aligning our manufacturing capacity with the current levels of automotive production in each region.

As we continue to operate in a cyclical industry that is impacted by movements in the global and regional economies, we continually evaluate opportunities to further refine our cost structure.

We continue to invest in research and development to support product innovation and long-term growth while maintaining disciplined capital allocation.

Cost reduction initiatives adopted by our customers continue to drive pricing pressure, including contractual step-downs in component pricing over program life cycles.

Our profitability depends on our ability to offset these reductions through operational efficiencies and cost savings.

Inflationary pressures and evolving trade policies have increased costs;

we continue to pursue price recoveries and contractual adjustments to mitigate these impacts.

We maintain a flexible cost structure, with a significant portion of our hourly workforce located in best cost countries and approximately 34% contingent labor as of June 30, 2026.

We continue to optimize our manufacturing footprint and cost structure through restructuring and operational initiatives to align capacity with demand and support investment in advanced technologies.

OEM product recalls .

The number of vehicles recalled globally by OEMs has increased above historical levels.

These recalls can either be initiated by the OEMs or influenced by regulatory agencies.

Although there are differing rules and regulations across countries governing recalls for safety issues, as automotive components are increasingly standardized across regions, the level of recalls outside of the United States may also increase.

Given the sensitivity to safety issues in the automotive industry, including increased focus from regulators and consumers, we anticipate the number of automotive recalls may remain above historical levels in the near future.

Although we engage in extensive product quality programs and processes, it is possible that we may be adversely affected in the future if the pace of these recalls continues.

Efficient use of capital .

The global vehicle components industry is generally capital intensive and a portion of a supplier’s capital equipment is frequently utilized for specific customer programs.

Lead times for procurement of capital equipment are long and typically exceed start of production by one to two years.

Substantial advantages exist for suppliers that can leverage their prior investments in capital equipment or amortize the investment over higher volume global customer programs.

Industry consolidation and disruptive new entrants .

Consolidation among worldwide OEMs and suppliers is expected to continue as these companies seek to achieve operating synergies and value stream efficiencies, acquire complementary technologies and build stronger customer relationships.

Additionally, the rise of advanced software and technologies in vehicles has attracted new and disruptive entrants from outside the traditional automotive supply industry.

These entrants may seek to gain access to certain vehicle component markets.

Any of these new competitors may develop and introduce components that gain greater customer or consumer acceptance, which could adversely affect the future growth of the Company.

We believe companies with strong balance sheets and financial discipline are in the best position to take advantage of these trends.

Global vehicle recalls have increased above historical levels, driven by both OEM-initiated actions and regulatory oversight.

While recall frameworks vary by country, increasing component standardization across markets may contribute to rising recall activity outside the United States.

Heightened regulatory and consumer focus on safety is expected to keep recall levels elevated in the near term.

Despite our robust quality programs and processes, sustained elevated recall activity could adversely affect our business.

Results of Operations

Versigent typically experiences fluctuations in revenue due to changes in OEM production schedules, vehicle sales mix and the net of new and lost business (which we refer to collectively as volume), increased prices attributable to escalation clauses in our supply contracts for recovery of increased commodity costs (which we refer to as commodity pass-through), fluctuations in foreign currency exchange rates (which we refer to as “FX”), contractual reductions of the sales price to the OEM (which we refer to as contractual price reductions) and engineering changes.

Changes in sales mix can have either favorable or unfavorable impacts on revenue.

Such changes can be the result of shifts in regional growth, shifts in OEM sales demand, as well as shifts in consumer demand related to vehicle segment purchases and content penetration.

For instance, a shift in sales demand favoring a particular OEMs’ vehicle model for which we do not have a supply contract may negatively impact our revenue.

A shift in regional sales demand toward certain markets could favorably impact the sales of those of our customers that have a large market share in those regions, which in turn would be expected to have a favorable impact on our revenue.

We typically experience (as described below) fluctuations in operating income due to:

• Volume, net of contractual price reductions—changes in volume offset by contractual price reductions (which typically range from 1% to 3% of net sales) and changes in mix;

• Operational performance—changes to costs for materials and commodities or manufacturing and engineering variances;

• Other—including restructuring costs and any remaining variances not included in Volume, net of contractual price reductions or Operational performance.

The automotive technology and component supply industry is traditionally subject to inflationary pressures with respect to raw materials and labor which may place operational and profitability burdens on the entire supply chain.

For instance, the industry has recently been subjected to increased pricing pressures, specifically in relation to copper, which has experienced significant volatility in price.

We have also been impacted globally by increased overall inflation as a result of a variety of global trends.

Due to various factors, the industry has recently been impacted by increased operating and logistics challenges from certain global supply chain disruptions.

For example, the rapidly evolving trade policies and tariff actions could result in increased pricing pressures on our global supply chain, which could adversely affect our business and financial results.

We expect commodity cost volatility to have a continual impact on future earnings and/or operating cash flows.

management continues to seek to mitigate both inflationary pressures and our material-related cost exposures using a number of approaches, including combining purchase requirements with our customers and/or suppliers, using alternate suppliers or product designs, and negotiating cost reductions and/or commodity cost contract escalation clauses into our vehicle manufacturer supply contracts.

We have also negotiated, and will continue to negotiate as necessary, price increases with our customers in response to the aforementioned increased overall inflation and global supply chain disruptions.

Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025

The results of operations for the three months ended March 31, 2026 and 2025 were as follows:

Three Months Ended March 31,

2026 2025 Favorable/(unfavorable)

Three and Six Months Ended June 30, 2026 versus Three and Six Months Ended June 30, 2025

The Company’s results of operations for the three and six months ended June 30, 2026 and 2025 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 Favorable/ (Unfavorable) 2026 2025 Favorable/ (Unfavorable)

(dollars in millions)

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Income before income taxes and equity income 157 130 27 225 250 (25)

Income tax benefit (expense) 9 (29) 38

Income tax expense (46) (21) (25) (37) (50) 13

Income before equity income 111 109 2 188 200 (12)

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Net income 116 112 4 197 208 (11)

Net income attributable to noncontrolling interest 3 1 2

Net (loss) income attributable to noncontrolling interest (2) 5 (7) 1 6 (5)

Net income attributable to Versigent

$ 118 $ 107 $ 11 $ 196 $ 202 $ (6)

Total Net Sales

Below is a summary of our total net sales for the three months ended March 31, 2026 versus March 31, 2025.

Three Months Ended March 31, Variance Due To:

2026 2025 Favorable/(unfavorable) Volume, net of contractual price reductions FX Commodity pass-through Other Total

(in millions) (in millions)

Total net sales $ 2,212 $ 2,024 $ 188 $ 66 $ 66 $ 56 $ — $ 188

Total net sales for the three months ended March 31, 2026 increased 9% compared to the three months ended March 31, 2025.

Our volumes increased 3% for the period, which primarily reflects volume growth in North America and Asia Pacific, partially offset by volume declines in Europe, compared to decreased global automotive production of 3%.

The increase in volumes reflect the impacts of favorable pricing, net of contractual price reductions, of $6 million.

In addition, our net sales reflect favorable foreign currency impacts, primarily related to the Euro.

Cost of Sales

Cost of sales is primarily comprised of material, labor, manufacturing overhead, freight, fluctuations in foreign currency exchange rates, product engineering, design and development expenses, depreciation, warranty costs and other operating expenses.

Gross margin is revenue less cost of sales and gross margin percentage is gross margin as a percentage of net sales.

Cost of sales increased $193 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, as summarized below.

The Company’s material cost of sales was approximately 55% of net sales for each of the three months ended March 31, 2026 and 2025.

Three Months Ended March 31, Variance Due To:

2026 2025 Favorable/(unfavorable) Volume (a) FX Operational performance Other Total

(dollars in millions) (in millions)

Cost of sales $ 1,968 $ 1,775 $ (193) $ (46) $ (80) $ 13 $ (80) $ (193)

Gross margin $ 244 $ 249 $ (5) $ 20 $ (14) $ 13 $ (24) $ (5)

Percentage of net sales 11.0 % 12.3 %

(a) Presented net of contractual price reductions for gross margin variance.

The increase in cost of sales reflects the impacts of increased volumes and currency exchange.

Cost of sales was also impacted by the following item in Other above:

• $87 million of increased commodity costs.

Selling, General and Administrative Expense

Three Months Ended March 31,

Net sales and Cost of sales

Net sales for the three months ended June 30, 2026 totaled $2,444 million, an increase of $238 million, or 11%, compared to the three months ended June 30, 2025.

Cost of sales and cost of sales as a percentage of net sales were $2,123 million and 87%, respectively, during the three months ended June 30, 2026, compared to $1,943 million and 88%, respectively, during the three months ended June 30, 2025.

The change in net sales, cost of sales, and gross profit for the three months ended June 30, 2026 was primarily driven by the impacts below.

Net Sales Cost of Sales Gross Profit

Three Months Ended June 30, 2025 $ 2,206 $ 1,943 $ 263

Volume 120 90 30

Pricing (18) — (18)

Foreign currency 40 29 11

Commodity impacts 96 105 (9)

Operational performance and other — (44) 44

Three Months Ended June 30, 2026 $ 2,444 $ 2,123 $ 321

Increasing volumes drove a 5% increase in sales for the period.

This primarily reflects volume growth in North America and Asia Pacific, partially offset by volume declines in Europe, compared to a slight decrease in global automotive production.

In addition, our net sales reflect higher customer pass-through due to higher commodity costs and foreign currency impacts, primarily related to the Euro and Chinese Yuan.

Cost of sales increased $180 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Increases were driven primarily by volume increases and higher commodity prices, partially offset by operational cost reductions.

Net sales for the six months ended June 30, 2026 totaled $4,656 million, an increase of $426 million, or 10%, compared to the six months ended June 30, 2025.

Cost of sales and cost of sales as a percentage of net sales were $4,091 million and 88%, respectively, during the six months ended June 30, 2026, compared to $3,718 million and 88%, respectively, during the six months ended June 30, 2025.

The change in net sales, cost of sales, and gross profit for the six months ended June 30, 2026 was primarily driven by the impacts below.

Net Sales Cost of Sales Gross Profit

Six Months Ended June 30, 2025 $ 4,230 $ 3,718 $ 512

Volume 180 136 44

Pricing (12) — (12)

Foreign currency 106 109 (3)

Commodity impacts 152 192 (40)

Operational performance and other — (64) 64

Six Months Ended June 30, 2026 $ 4,656 $ 4,091 $ 565

Increasing volumes drove a 4% increase in sales for the period.

This primarily reflects volume growth in North America and Asia Pacific, partially offset by volume declines in Europe, compared to a slight decrease in global automotive production.

In addition, our net sales reflect higher customer pass-through due to higher commodity costs and foreign currency impacts, primarily related to the Euro and Chinese Yuan.

Cost of sales increased $373 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Increases were driven by higher volumes, increases in commodity prices and strengthening of foreign currencies, partially offset by operational cost reductions.

Selling, general and administrative expenses (SG&A)

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 Favorable/

(unfavorable)

(dollars in millions)

Selling, general and administrative expense $ 97 $ 105 $ 8

(unfavorable) 2026 2025 Favorable/(unfavorable)

(dollars in millions) (dollars in millions)

Selling, general and administrative expenses $ 100 $ 104 $ 4 $ 197 $ 209 $ 12

Percentage of net sales 4.1 % 4.7 % 4.2 % 4.9 %

Selling, general and administrative expense (“SG&A”) primarily includes administrative expenses, information technology costs, incentive compensation related cost.

SG&A decreased as a percentage of net sales for the three months ended March 31, 2026 compared to 2025, primarily due to a decrease in bad debt expense.

Three Months Ended March 31,

2026 2025 Favorable/

(unfavorable)

(in millions)

Amortization $ 1 $ — $ (1)

SG&A primarily includes administrative expenses, information technology costs, incentive compensation related costs and selling and marketing expenses.

SG&A remained relatively flat during the three months ended June 30, 2026 compared to the same period in 2025.

SG&A decreased during the six months ended June 30, 2026 compared to the same period in 2025, primarily due to a decrease in bad debt expense.

Amortization expense was de minimis and $1 million for the three months ended June 30, 2026 and 2025, respectively.

During both the six months ended June 30, 2026 and June 30, 2025, amortization expense was $1 million.

Amortization expense reflects the non-cash charge related to definite-lived intangible assets.

Amortization during three months ended March 31, 2026 reflects the continued amortization of our intangible assets.

Amortization during the three and six months ended June 30, 2026 reflects the continued amortization of our intangible assets.

Restructuring

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 Favorable/

(unfavorable) 2026 2025 Favorable/

(unfavorable)

(dollars in millions)

(dollars in millions) (dollars in millions)

Restructuring $ — $ 25 $ 25 $ 46 $ 41 $ (5)

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These programs are primarily focused on reducing global overhead costs, the continued rotation of our manufacturing footprint to best cost locations in Europe and aligning our manufacturing capacity with the current levels of automotive production in each region.

During the three months ended March 31, 2026, the Company recorded employee-related and other restructuring charges related to these programs totaling approximately $46 million, including the recognition of approximately $33 million for the planned closure of a European manufacturing site.

During the three months ended March 31, 2025, Versigent recorded employee-related and other restructuring charges totaling approximately $16 million, which reflect programs to align manufacturing capacity with the current levels of automotive production in each region.

The charges recorded during the three months ended March 31, 2025 included the recognition of approximately $13 million for programs to downsize European manufacturing sites.

Charges for the six months ended June 30, 2026 included the recognition of approximately $33 million for a program to downsize and close a European manufacturing site.

Charges for the three and six months ended June 30, 2025, included the recognition of approximately $9 million and $22 million, respectively, for charges incurred to downsize European sites.

We expect to continue to incur additional restructuring expense in 2026 and beyond, primarily related to programs focused on reducing global overhead costs, the continued rotation of our manufacturing footprint to best cost locations in Europe and aligning manufacturing capacity with the levels of automotive production.

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Refer to Note 9.

Restructuring to the combined financial statements contained herein for additional information.

Separation costs

Three Months Ended March 31,

2026 2025 Favorable/

(unfavorable)

(in millions)

Restructuring to the consolidated financial statements contained herein for additional information.

Separation costs

The Company incurred separation costs of $26 million and $5 million during the three months ended March 31, 2026 and 2025, respectively, which include one-time expenses related to the planning and execution of the Separation.

The Company incurred separation costs of $22 million and $2 million during the three months ended June 30, 2026 and 2025, respectively.

During the the six months ended June 30, 2026 and 2025, the Company incurred separation costs of $48 million and $7 million, respectively.

Separation costs for all periods include one-time expenses related to the planning and execution of the Separation.

The Company expects to continue to incur additional expenses related to the Separation in 2026.

Interest expense

Three Months Ended March 31,

2026 2025 Favorable/

(unfavorable)

(in millions)

Interest expense $ 5 $ 2 $ (3)

Interest expense was $5 million and $2 million for the three months ended March 31, 2026 and 2025, respectively.

The increase was related to the issuance of our Senior Notes and Credit Agreement in connection with the Separation.

Interest expense was $36 million and $1 million for the three months ended June 30, 2026 and 2025, respectively.

During the six months ended June 30, 2026 and 2025, interest expense was $41 million and $3 million, respectively.

The increase during the three and six months ended June 30, 2026 compared to 2025 was related to the issuance of our Senior Notes and Credit Agreement in connection with the Separation.

Refer to Note 10.

Debt, to the combined financial statements contained herein for additional information.

Debt, to the consolidated financial statements contained herein for additional information.

Other expense, net

Three Months Ended March 31,

2026 2025 Favorable/

(unfavorable)

(in millions)

Other expense, net was $6 million and de minimis for the three months ended June 30, 2026 and 2025, respectively.

Other expense, net was $7 million and $1 million for the six months ended June 30, 2026 and 2025, respectively.

Other expense, net was comprised of the following:

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 Favorable/(unfavorable) 2026 2025 Favorable/(unfavorable)

(in millions) (in millions)

Interest income $ — $ 1 $ (1) $ 3 $ 2 $ 1

Components of net periodic benefit cost other than service cost (Note 11) (6) (2) (4) (15) (4) (11)

Other, net — 1 (1) 5 1 4

Other expense, net $ (6) $ — $ (6) $ (7) $ (1) $ (6)

Other expense, net for the three months ended March 31, 2026 primarily includes $9 million of net periodic benefit cost other than service cost, offset by interest income of $3 million and other gains of $5 million.

Other expense, net for the three months ended March 31, 2025 primarily includes $2 million of net periodic benefit cost other than service cost.

Details of pension and postretirement benefits are further described in Note 11.

Pension Benefits to the combined financial statements contained herein.

Refer to Note 17.

Other Expense, Net, to the combined financial statements contained herein for additional information.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 Favorable/

(unfavorable) 2026 2025 Favorable/

(unfavorable)

(in millions)

Income tax (benefit) expense $ (9) $ 29 $ 38

The Company’s tax rate is affected by the fact that its Parent entity is a Swiss resident taxpayer, the tax rates in Switzerland and other jurisdictions in which the Company operates, the relative amount of income earned by jurisdiction and the relative amount of losses or income for which no tax benefit or expense was recognized due to a valuation allowance.

(in millions) (in millions)

Income tax expense $ 46 $ 21 $ (25) $ 37 $ 50 $ 13

The Company’s tax rate is affected by the fact that it is a Swiss resident taxpayer, the tax rates in Switzerland and other jurisdictions in which the Company operates, the relative amount of income earned by jurisdiction and the relative amount of

losses or income for which no tax benefit or expense was recognized due to a valuation allowance.

The Company’s effective tax rate is also impacted by the receipt of certain tax incentives and holidays that reduce the effective tax rate for certain subsidiaries below the statutory rate.

The Company’s effective tax rate for the three months ended March 31, 2026 and 2025 includes net discrete tax benefits of approximately $24 million and net discrete tax expenses of $2 million, respectively.

The net discrete tax benefits for the three months ended March 31, 2026 are primarily related to changes in reserves.

The net discrete tax expenses for the three months ended March 31, 2025 are primarily related to provision to return adjustments.

The Company’s effective tax rate for the three months ended June 30, 2026 and 2025 includes net discrete tax expenses of approximately $2 million and net discrete tax benefits of $6 million, respectively.

The net discrete tax expense for the three months ended June 30, 2026 are primarily related to changes in reserves.

The net discrete tax benefits for the three months ended June 30, 2025 are primarily related to provision to return adjustments and changes in valuation allowances.

The Company’s effective tax rate for the six months ended June 30, 2026 and 2025 includes net discrete tax benefits of approximately $22 million and net discrete tax benefits of $4 million, respectively.

The net discrete tax benefits for the six months ended June 30, 2026 are primarily related to changes in reserves.

The net discrete tax benefits for the six months ended June 30, 2025 are primarily related to provision to return adjustments and changes in valuation allowances.

On January 15, 2025, the OECD released Administrative Guidance (the “Guidance”) on Article 9.1 of the Global Anti-Base Erosion Model Rules (the “Model Rules”) which amends the Pillar Two Framework.

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While the Guidance is applicable to the tax incentive granted to the Company’s Swiss subsidiary in 2023, a full valuation allowance against this attribute has been maintained since 2023.

Therefore, the Guidance did not result in a change during the three months ended March 31, 2026 and 2025.

No other deferred tax assets are impacted by the Guidance.

Therefore, the Guidance did not result in a change on the Company’s consolidated financial statements.

No other deferred tax assets are impacted by the Guidance.

On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was enacted into law.

The Act includes changes to U.S.

tax law that will be applicable to Versigent beginning in 2025, with additional provisions applying in subsequent years.

tax law that were applicable to Versigent beginning in 2025, with additional provisions applying in subsequent years.

Included in these changes are favorable adjustments to deductions for interest, qualified property, and research and development expenditures, as well as reforms to the international tax framework.

The Act will not have a material impact on the Company’s combined financial statements.

The Act will not have a material impact on the Company’s consolidated financial statements.

Refer to Note 13.

Income Taxes to the combined financial statements contained herein for additional information.

Equity Income

Three Months Ended March 31,

Income Taxes to the consolidated financial statements contained herein for additional information.

Equity Income, net of tax

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 Favorable/

(unfavorable) 2026 2025 Favorable/

(unfavorable)

(in millions)

(in millions) (in millions)

Equity income, net of tax 5 3 $ 2 9 8 $ 1

1 unchanged sentence

Refer to Note 6.

Investments in Affiliates to the unaudited combined interim financial statements included elsewhere in this information statement for additional information.

Investments in Affiliates to the unaudited consolidated interim financial statements included elsewhere in this information statement for additional information.

Non-GAAP Measures

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GAAP and non-GAAP financial measures for operational and financial decision making, and to assess Company performance.

Adjusted EBITDA is a non-GAAP measure, which is defined as net income before depreciation and amortization (including asset impairments), interest expense, income tax (expense) benefit, other income (expense), net, equity income (loss), net of tax, restructuring, separation costs related to the Spin-Off, other acquisition and portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures), and other special items.

Adjusted EBITDA is a non-GAAP measure, which is defined as net income before depreciation and amortization (including asset impairments), interest expense, income tax (expense) benefit, net (loss) income attributable to noncontrolling interest, other income (expense), net, equity income (loss), net of tax, restructuring, separation costs related to the Spin-Off, other acquisition and portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures), and other special items.

Not all companies use identical calculations of Adjusted EBITDA, therefore this presentation may not be comparable to other similarly titled measures of other companies.

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GAAP measure, provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of the Company’s core operating performance and that may obscure underlying business results and trends.

We also use adjusted EBITDA for internal planning and forecasting purposes.

We also use Adjusted EBITDA for internal reporting, planning and forecasting purposes.

Adjusted EBITDA and Adjusted EBITDA Margin should not be considered a substitute for results prepared in accordance with U.S.

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EBITDA margin represents EBITDA as a percentage of net sales, and Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of net sales.

Adjusted EBITDA for the Three Months Ended March 31, 2026 versus the Three Months Ended March 31, 2025

The reconciliations of net income attributable to Versigent to Adjusted EBITDA for the three months ended March 31, 2026 and 2025 are as follows:

Three Months Ended March 31,

Adjusted EBITDA for the Three Months Ended June 30, 2026 versus the Three Months Ended June 30, 2025

The reconciliations of net income attributable to Versigent to Adjusted EBITDA for the three months ended June 30, 2026 and 2025 are as follows:

Three Months Ended June 30,

(dollars in millions)

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Interest expense 36 1

Income tax (benefit) expense (9) 29

Income tax expense 46 21

Net (loss) income attributable to noncontrolling interest (2) 5

Depreciation and amortization 51 59

EBITDA $ 249 10.2% $ 193 8.7%

Other expense, net 6 —

Equity income, net (5) (3)

Restructuring — 25

Separation costs 22 2

Other acquisition and portfolio project costs — 1

Adjusted EBITDA $ 272 11.1% $ 218 9.9%

The following table presents the year-over-year change in net sales and Adjusted EBITDA for the three months ended June 30, 2026 versus 2025:

Net Sales Adjusted EBITDA

June 30, 2025 $ 2,206 $ 218

Volume 120 30

Pricing (18) (18)

Foreign currency 40 13

Commodity impacts 96 (9)

Operational performance and other — 38

June 30, 2026 $ 2,444 $ 272

As noted in the table above, the Company’s Adjusted EBITDA margin for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 was 11.1% and 9.9%, respectively.

The increase in the Company’s Adjusted EBITDA was primarily due to favorable volume and operational cost reductions.

Adjusted EBITDA for the Six Months Ended June 30, 2026 versus the Six Months Ended June 30, 2025

The reconciliations of net income attributable to Versigent to Adjusted EBITDA for the six months ended June 30, 2026 and 2025 are as follows:

Six Months Ended June 30,

(dollars in millions)

$ Margin $ Margin

Net income attributable to Versigent

$ 196 4.2 % $ 202 4.8 %

Interest expense 41 3

Income tax expense 37 50

Net income attributable to noncontrolling interest 1 6

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Adjusted EBITDA $ 475 10.2 % $ 416 9.8 %

Below is a summary of our Adjusted EBITDA for the three months ended March 31, 2026 versus 2025.

Three Months Ended March 31, Variance Due To:

2026 2025 Favorable/

(unfavorable) Volume, net of contractual price reductions Operational performance Other Total

(in millions) (in millions)

Adjusted EBITDA $ 203 $ 198 $ 5 $ 20 $ 13 $ (28) $ 5

As noted in the table above, Adjusted EBITDA for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was impacted by favorable volume and the impact of favorable pricing of $6 million, and improved operational performance.

Adjusted EBITDA was also impacted by the following items included within Other in the table above:

• $16 million of unfavorable foreign currency impacts, primarily related to the Mexican Peso, partially offset by the Euro.

The following table presents the year-over-year change in net sales and Adjusted EBITDA for the six months ended June 30, 2026 versus 2025:

Net Sales Adjusted EBITDA

June 30, 2025 $ 4,230 $ 416

Volume 180 44

Pricing (12) (12)

Foreign currency 106 (5)

Commodity impacts 152 (40)

Operational performance and other — 72

June 30, 2026 $ 4,656 $ 475

As noted in the table above, the Company’s Adjusted EBITDA margin for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 was 10.2% and 9.8%, respectively.

The increase in the Company’s Adjusted EBITDA was primarily due to favorable volume and operational cost reductions offset by unfavorable commodity pricing impacts.

Liquidity and Capital Resources

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To the extent we generate discretionary cash flow we may consider using this additional cash flow for optional prepayments, redemptions or repurchases of existing indebtedness (including through open market purchases), undertake new capital investment projects, strategic acquisitions, return capital to shareholders and/or general corporate purposes.

As of March 31, 2026, we had cash and cash equivalents of $282 million and net debt (defined as outstanding debt less cash and cash equivalents) of $1,859 million.

The following table summarizes our available liquidity, which includes cash, cash equivalents and funds available under our significant committed credit facilities, as of March 31, 2026:

We will also routinely monitor the markets and may opportunistically issue debt or equity to refinance existing debt or fund capital resources.

As of June 30, 2026, we had cash and cash equivalents of $554 million and net debt (defined as outstanding debt less cash and cash equivalents) of $1,670 million.

The following table summarizes our available liquidity, which includes cash, cash equivalents and funds available under our significant committed credit facilities, as of June 30, 2026:

(in millions)

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We utilize a combination of strategies, including dividends, cash pooling arrangements, intercompany loan repayments and other distributions and advances to provide the funds necessary to meet our global liquidity needs.

As of March 31, 2026, the Company’s cash and cash equivalents held by our non-U.S.

As of June 30, 2026, the Company’s cash and cash equivalents held by our non-U.S.

subsidiaries totaled approximately $545 million.

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cash was needed for our U.S.

operations, we may be required to accrue and pay withholding if we were to transfer such funds from non-U.S.

subsidiaries to the U.S.;

however, based on our current liquidity needs and strategies, we do not anticipate a need to accrue and pay such additional amounts.

Dividend Policy

In April 2026, our Board of Directors approved a dividend policy under which the Company intends to return a portion of future earnings to shareholders through a regular dividend in the range of $0.13 per share quarterly, with the initial dividend expected to be declared at a future date.

Our Board of Directors will determine dividends on our ordinary shares on a quarterly basis after considering our available cash from earnings, our anticipated cash needs and current conditions in the economy and financial markets.

The announcement and payment of cash dividends on our ordinary shares in the future, in this amount or otherwise, will be within the discretion of our Board of Directors at such time.

operations, we would utilize a combination of the strategies mentioned above.

In April 2026, our Board of Directors approved a dividend policy under which the Company intends to return a portion of future earnings to shareholders through a regular dividend.

On August 3, the Company's Board of Directors declared a quarterly cash dividend of $0.13 per share, payable on September 18, 2026 to shareholders of record at the close of business on September 4, 2026.

The declaration and payment of future dividends are subject to the discretion of the Company’s Board of Directors and will depend on the Company’s financial condition, results of operations, cash requirements, and other factors deemed relevant by the Board of Directors, and there can be no assurance that the Board of Directors will declare a dividend in the future.

Share Repurchase Program

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Approximately $15 million in debt issuance costs were incurred in connection with the Credit Agreement.

As of March 31, 2026, Versigent had no amounts outstanding under the Revolving Credit Facility and no letters of credit have been issued under the Credit Agreement.

As of June 30, 2026, Versigent had no amounts outstanding under the Revolving Credit Facility and no letters of credit have been issued under the Credit Agreement.

Letters of credit issued under the Credit Agreement reduce availability under the Revolving Credit Facility.

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The applicable interest rate margins for the Credit Facilities will increase or decrease from time to time between 1.25% and 2.00% per annum (for Term Benchmark and RFR loans) and between 0.25% and 1.00% per annum (for ABR loans), in each case based upon changes to our total leverage ratio.

Accordingly, the interest rates for the Credit Facilities will fluctuate during the term of the Credit Agreement.

Accordingly, the interest rates for the Credit Facilities will fluctuate

during the term of the Credit Agreement.

The Credit Agreement also requires that we pay certain facility fees on the aggregate commitments under the Revolving Credit Facility and certain letter of credit issuance and fronting fees.

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The rates under the Term Loan A Facility on the specified dates are set forth below:

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

ABR plus Benchmark Loans plus ABR plus Benchmark Loans plus

Term Loan A 0.50 % 1.50 % N/A N/A

The Credit Agreement also contains events of default customary for financings of this type.

The Company is in compliance with the Credit Agreement covenants.

Senior Unsecured Notes

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Interest is payable semi-annually on April 15 and October 15 of each year to holders of record at close of business on April 1 or October 1 immediately preceding the interest payment date.

The proceeds received from the Notes offerings were deposited into escrow and subsequently released to Versigent PLC upon satisfaction of certain conditions in connection with the Spin-Off.

From the date of the satisfaction of the escrow conditions, the notes are guaranteed, jointly and severally, on an unsecured basis, by each of our current and future domestic subsidiaries that guarantee our Credit Facilities, as described above.

The proceeds from the Notes, together with the proceeds from the borrowings under the Credit Agreement, were used to fund a $1,900 million dividend to the Parent, with remaining proceeds used for general corporate purposes.

The notes are guaranteed, jointly and severally, on an unsecured basis, by each of our current and future domestic subsidiaries that guarantee our Credit Facilities, as described above.

The proceeds from the Notes, together with the proceeds from the borrowings under the Credit Agreement, were used to fund a $1,894 million dividend to the Former Parent, with remaining proceeds used for general corporate purposes.

Other Financing

Finance leases and other —As of March 31, 2026 and December 31, 2025, approximately $69 million and $61 million, respectively, of other debt primarily issued by certain non-U.S.

Finance leases and other —As of June 30, 2026 and December 31, 2025, approximately $151 million and $61 million, respectively, of other debt primarily issued by certain non-U.S.

subsidiaries and finance lease obligations of Versigent were outstanding.

Dividends from Equity Investments

During the three months ended March 31, 2026, Versigent received dividends of $2 million from its equity method investments.

No dividends were received from the Company’s equity method investments during the three months ended June 30, 2026, compared to $8 million received during the three months ended June 30, 2025.

During the six months ended June 30, 2026, Versigent received dividends of $2 million, compared to $8 million received during the six months ended June 30, 2025.

The dividends were recognized as a reduction to the investment and represented a return on investment included in cash flows from operating activities.

There were no dividends received from these non-combined affiliates for the three months ended March 31, 2025.

Operating activities —Net cash provided by operating activities totaled $36 million and $40 million for the three months ended March 31, 2026 and 2025, respectively.

Cash flows provided by operating activities for the three months ended March 31, 2026 consisted primarily of net earnings of $81 million, increased by $73 million for non-cash charges for depreciation, amortization and pension costs, partially offset by $118 million related to changes in operating assets and liabilities, net of restructuring and pension contributions.

Cash flows provided by operating activities for the three months ended March 31, 2025 consisted primarily of net earnings of $96 million, increased by $55 million for non-cash charges for depreciation, amortization and pension costs, partially offset by $119 million related to changes in operating assets and liabilities, net of restructuring and pension contributions.

Investing activities —Net cash used in investing activities totaled $66 million and $37 million for the three months ended March 31, 2026 and 2025, respectively and consisted of capital expenditures.

Financing activities —Net cash provided by and used in financing activities totaled $38 million and $21 million for the three months ended March 31, 2026 and 2025, respectively.

Cash flows provided by financing activities for the three months ended March 31, 2026 primarily included $2,063 million in proceeds from issuance of senior notes and credit agreement, net of issuance costs, offset by a $1,900 million cash distribution paid to Parent in connection with the Separation.

Cash flows used in financing activities for the three months ended March 31, 2025 primarily included $72 million for repayments under short-term debt agreements offset by cash transferred from Parent.

Operating activities —Net cash provided by operating activities totaled $194 million and $190 million for the six months ended June 30, 2026 and 2025, respectively.

Cash flows provided by operating activities for the six months ended June 30, 2026 consisted primarily of net earnings of $197 million, increased by $151 million for non-cash charges for depreciation, share-based compensation and pension costs, partially offset by $156 million related to changes in operating assets and liabilities, net of restructuring and pension contributions.

Cash flows provided by operating activities for the six months ended June 30, 2025 consisted primarily of net earnings of $208 million, increased by $133 million for non-cash charges for depreciation, share-based compensation and pension costs, partially offset by $152 million related to changes in operating assets and liabilities, net of restructuring and pension contributions.

Investing activities —Net cash used in investing activities totaled $117 million and $79 million for the six months ended June 30, 2026 and 2025, respectively, and consisted of capital expenditures.

Financing activities —Net cash provided by financing activities totaled $203 million and $1 million for the six months ended June 30, 2026 and 2025, respectively.

Cash flows provided by financing activities for the six months ended June 30, 2026 primarily included $2,063 million in proceeds from issuance of senior notes and credit agreement, net of issuance costs, offset by a $1,894 million cash distribution paid to Former Parent in connection with the Separation.

Cash flows provided by financing activities for the six months ended June 30, 2025 primarily included $134 million of cash transferred from Former Parent offset by repayments under short-term debt agreements.

Off-Balance Sheet Arrangements

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Critical Accounting Estimates

There have been no significant changes in our critical accounting estimates during the three months ended March 31, 2026.

There have been no significant changes in our critical accounting estimates during the three and six months ended June 30, 2026.

Recently Issued Accounting Pronouncements

The information concerning recently issued accounting pronouncements contained in Note 2.

Significant Accounting Policies to the unaudited combined financial statements included in Part I, Item 1 of this report is incorporated herein by reference.

Significant Accounting Policies to the unaudited consolidated financial statements included in Part I, Item 1 of this report is incorporated herein by reference.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis