Nexteer Automotive Group Limited

Ladies and gentlemen, welcome to the next year Automotive Group Limited 2025 first quarter investor communication call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note the call is being recorded. I would now like to turn the conference over to Investor Relations Director, Mr. Tony Wong. Please go ahead.

Thank you, Drew. Good day, everyone. Welcome to Next Year Automotive 2025 First Quarter Global Investor Communication Call. On the call today, we have our Executive Board Director, President, CTO, and Chief Strategy Officer, Robby Milovic. Senior Vice President and COO, Irvi Boyer. Senior Vice President and CFO, Mike Bialan. Today's call will be relatively quick, taking around 30 minutes covering a few latest updates from company 4Q1. First, we will have Robin to provide an update of the concept's business development, and then Mike will go through the latest operating environment status, including the view on Taurus. Beyond that, we will take some questions. I would remind you of today's communication package as being posted on our company's website. And the safe harbor statement governs today's communication. Now, I will hand it over to Robin.

Okay. Thank you, Tony, and good day to everyone on the call. So, I'm pleased to provide a business update for the first quarter. But before getting started, I'd like to thank and recognize our One Next Year global team. 2025 so far has brought with it ongoing challenges, including a very dynamic tariff environment, rare earth mineral supply chain restrictions, and other uncertainties. Not only is the team effectively managing these challenges, but we also continue to roll out innovative new technology to meet the needs of the global vehicle marketplace. Shortly, I'll highlight some of the announcements made during the Shanghai Auto Show. Our theme for that show is was pioneering motion control globally at China's speed through vision, velocity, and value. I'm very excited to summarize these new technology introductions here in just a few minutes. After that, Mike will focus more on the latest operating environment we're experiencing and our considerations for the balance of this year. Let's start out with new program launches. So during the first quarter of 2025, we achieved another record of 23 new program launches, including 14 representing battery electric vehicle platforms supported by our products, and 19 programs representing new or conquest business. We also had successful program launches globally across all regions, with three in North America, five in EMEA-SA, and 15 in APAC. In our EMEA SA division, we launched several single-pinion and column-based EPS programs for major European customers. And in APAC, we had several new half-set programs that launched to deliver advanced comfort, durability, and power in new energy vehicles, mainly for Chinese OEMs. Considering the balance of the year, we expect another very heavy EPS launch cycle, including our first dual-pinion EPS in the China market. we're well on track to achieve another record launch year for the full year. Moving into new business wins, I'd like to highlight three accomplishments in terms of new bookings secured in the first quarter. Our strong bookings momentum continues with leading China OEMs, both domestically in China as well as in support of their global strategies covering both export and localizations. Notably, the bookings secured in Q1 with COEMs include high-end and new products we just recently announced. Those include rear-wheel steering, rack EPS, and dual pinion EPS. Second, we successfully re-secured an important column business with a North American customer. This business was re-won after having lost it to a competitor several years ago when our customer wanted to diversify its supply panel for full-size trucks. You may remember the financial impact of this program loss had to our North American performance back in 2018 and 19. Today, we're very excited to win this business back and it's a good example of the benefits of our manufacturing strategy for North American columns that has now enabled us to improve our competitiveness and scale in Mexico. Lastly, as next year has unveiled our latest motion control innovations at the Shanghai Auto Show, Our motion-by-wire portfolio strategically expanded into steer-by-wire, rear-wheel steering, brake-by-wire, and software. We're very confident to secure more by-wire-related bookings throughout the year and accelerating that trend as we enter the second half of this decade. The middle part of this slide indicates our quarterly bookings, followed by our forecasted order bookings for the full year. We booked $0.8 billion in Q1 and we're forecasting $5 billion of bookings for the full calendar year. The right-hand side shows the year-to-date bookings composition. You can see within the year-to-date new business bookings, electric-powered steering accounted for 36%, while columns accounted for 45%, reflecting the significant booking we gained from a North America customer. This new win also drives high booking rate in terms of divisional and new versus conquest bookings breakdown. And finally, nearly 40% of the total bookings are China OEMs. The strong China OEMs exposed bookings indicate how we are fully aligned with the growth mega trend in China. Next slide is our motion by wire chassis portfolio expansion. So we have built a comprehensive motion by wire chassis portfolio that includes steer-by-wire, rear-wheel steering, brake-by-wire, and software. The interactive chassis display shown on this slide demonstrates how we simulate driving experience and three-cabin design. And I'll elaborate a little on each of them. First, steer-by-wire and rear-wheel steering, including software and systems integration, hand-wheel actuators and road-wheel actuators for both the front and rear of the vehicle. We have made great progress to secure several significant steer-by-wire bookings in the past couple of years, including one enabled Level 4 and Mobility as a Service vehicle with a global EV leader, and another win with a leading Chinese NEV OM. We are expecting additional steer-by-wire opportunities in the near term, especially in the China market. In terms of rear-wheel steering, Nextgear strategically designed our rear-wheel steering to solve industry challenges and leverage our existing technology leadership and building blocks. We earned two rear-wheel steering contracts with the leading Chinese OEM and expect to start production in 2026. Next, brake-by-wire. Nextgear's new electromechanical braking system officially debuted at the 2025 Shanghai Auto Show. We leverage our technology building blocks to create a modular, high-precision braking system to strategically expand into motion-by-wire chassis control. We are expecting to secure our first EMV booking with the Chinese OEM later this year and plan to start production within the next two years. Braking technology is experiencing a shift from hydraulic brakes to electrical-based brakes. This technology shift aligns well with next year's core competencies. Future electric braking systems will leverage electric motors, electronic controllers, mechanical actuators, and software. These are all natural extensions of next year's current steering technology. Combined with our competitive global supply chain and manufacturing excellence and expertise, next year is well positioned to aggressively compete in this new market. Next is software. That drives next year's bi-wire technologies. and enables software-defined chassis, such as advanced vehicle dynamics functions like steer-by-brake and hands-off detection, vehicle health management, and tools for accelerating vehicle development and integration. And finally, dry-glide, which delivers advanced comfort, durability, and power through a portfolio of premium, low-mass, compact half-shafts, and high-efficiency tri-glide joints, especially important in any of these e-drive powertrains with increased torque and regenerative braking demand. As a proven global innovator of safety-critical motion control, Mextier is a trusted partner across global markets. We have been growing alongside leading Chinese OEMs, enabling them, as well as legacy OEMs, to anticipate, adapt, and get to market quickly with the latest technologies with built-in quality and value. OEMs choose next year because of our vision, velocity, and value that's critical to succeed in these hypercompetitive and quickly shifting markets.