Ameren Corporation

Good morning, everyone. My name is Jamie, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the American Axle and Manufacturing First Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press the star key and the number one on your telephone keypads. If you would like to withdraw your questions, you may press star and 2. As a reminder, today's event is being recorded. At this time, I'd like to turn the floor over to Mr. David Lim, Head of Investor Relations. Please go ahead, Mr. Lim.

Thank you, and good morning. I'd like to welcome everyone who is joining us on AEM's first quarter earnings call. Earlier this morning, we released our first quarter of 2023 earnings announcements. You can access this announcement on the investor relations page of our website, www.aem.com, and through the PR Newswire services. You can also find supplemental slides for this conference call on the investor page of our website as well. To listen to a replay of this call, you can dial 1-877-344-7529, replay access code 876-3803. This replay will be available through May 12th. Before we begin, I would like to remind everyone that the matters discussed in this call may contain comments and forward-looking statements subject to risks and uncertainties which cannot be predicted or quantified and which may cause future activities and results of operations to differ materially from those discussed. For additional information, we ask that you refer to our filings with the Securities and Exchange Commission. Also, during this call, we may refer to certain non-GAAP financial measures. Information regarding these non-GAAP measures as well as a reconciliation of these non-GAAP measures to GAAP financial information is available on our website. With that, let me turn things over to AAM's Chairman and CEO, David Dowd.

Thank you, David, and good morning, everyone. Thanks for joining us today to discuss AAM's financial results for the first quarter of 2023. Joining me on the call today is Chris May, AAM's Executive Vice President and Chief Financial Officer. To begin my comments, I'll review the highlights of our first quarter financial performance. Next, I will touch on some exciting news in the quarter, including significant developments with our electrification business. The momentum of our technology is clear and is accelerating. The combination of our technology leadership, including power density, mass optimization, efficiency, and NVH expertise is driving a strong interest in our product portfolio. After Chris covers the details of our financial results, we'll open up the call to any questions that you all may have. So let's begin. AM's first quarter of 2023 sales were $1.49 billion. AM continues to be impacted by downtime at our largest customers and production volatility. We are closely monitoring the overall macro environment, including rising interest rates and consumer sentiment that drives production and demand. We remain focused on factors that we can control. From a profitability perspective, AM's adjusted EBITDA in the first quarter was $175 million, or 11.7% of sales. Disruption in the supply chain and changes to the production schedules adversely impacted AM in the quarter. This continues to be exacerbated by a tight labor market. We anticipate this backdrop to continue throughout 2023 but we remain hopeful that the operating environment should incrementally improve in successive quarters. We experienced launch costs in the first quarter as the company is in the launch mode on some of our most significant launches of the year. We anticipate these costs to stabilize in the following quarters, and Chris will provide more details about our EBITDA performance in the quarter. AM's adjusted earnings per share in the first quarter of 2023 was a loss of one penny. AIM experienced a cash outflow in the quarter, and AIM's adjusted free cash flow use in the first quarter was $17 million. Let me talk about some exciting business updates and key highlights, which you can see on slide four of our investment package. Earlier this year, at our Technology Day, we showed the investment community the strengths and the advantages of our electric propulsion product portfolio. Today, that technology foundation is continuing to manifest into tangible results. We are very pleased to announce that AM will supply Stellantis with e-beam axles for a future electric vehicle program. The program is set to launch in the latter part of this decade. We are limited on any other further details that we can share on this significant program, but we are clearly demonstrating our capabilities and value proposition in electric propulsion technology and systems integration to the OEM community. This is a great example of how AM is leveraging the actual heritage of the company with cutting-edge electric propulsion technology leadership of today to drive our future growth. In the past several quarters, we have announced multiple eBEAM awards with ECA, Jupiter, and now Stellantis. And we expect the momentum to continue as we are in significant conversations with a number of other OEMs. Remember, our E-Beams and EDUs are designed to support multiple vehicle segments and architectures. Additionally, AM made a commitment and investment in the Global Strategic Mobility Fund, which is managed by Entertech Venture Capital. The investment provides AM with access to new startup and fully vetted high-tech companies advancing automotive technologies. From a business recognition standpoint, we're excited to share that AM was once again recognized by General Motors with the Overdrive Award for its efforts in sustainability. This is our third consecutive year of receiving the Overdrive Award, which recognizes suppliers for performance in such areas as purchasing, manufacturing services, customer care, after sales, and logistics. AM also made the list of America's best large employers by Forbes, our fourth time in doing so, And Newsweek recognized AM as one of America's most responsible companies here in 2023. From an ESG perspective, we are also very pleased to announce that we recently published in April our 2022 Sustainability Report. Some of the key highlights of this report include achieving our SBDI validation of greenhouse gas emission goals, an AMIS rating on the CDP Climate Change Survey, hiring our first executive for diversity, equity, and inclusion, improving our all-safety performance metrics, and establishing a supplier sustainability council while increasing our spend with diverse suppliers. Clearly, AEM is committed to properly growing our business in a way that is sustainable, socially responsible, and equitable. To close out my comments, slide six shows our guidance, which is unchanged, And AM is targeting sales from $5.95 billion to $6.25 billion, adjusted EBITDA of approximately $725 to $800 million, adjusted free cash flow of approximately $225 to $300 million, which assumes a capital spending in the range of 3.5% to 4%. So again, unchanged from earlier guidance. And the continuation of the theme that started in the past several years, the operating environment remains dynamic. but we are hopeful to see some stabilization in the second half of the year. And it is difficult to predict when normal will return, but until it does, we will continue to remain focused on cost control, daily performance and execution, continuous improvement, quality performance, and bringing the future faster. And as we've communicated many times before, our aim in the future, and we will continue to drive our efforts towards securing our primary legacy business, generating strong free cash flow, strengthening our balance sheet, advancing our electrification portfolio, and positioning AM for future profitable growth. I'm very excited about what lies ahead for AM. And that concludes my remarks. Let me now turn the call over to our Executive Vice President and Chief Financial Officer, Chris May. Chris?