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Good morning. This is the conference operator. Welcome and thank you for joining today's Formia first quarter 2024 sales conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions by pressing star and 1 at any time. Should anyone need assistance during the conference call, they may signal an operator by pressing star and 0 on their telephone. At this time, I would like to turn the conference over to Mr. Olivier Durand, Group Chief Financial Officer. Please, go ahead, sir.

Thank you. Good morning, ladies and gentlemen. Welcome to the Q1 Business Review Call of Forvia. I am today with our investor relations team, Marc Maillet and Sébastien Leroy. We will cover today the key events of Q1 for our company. And in particular, our revenue results for Q1, our progress in the delivery of our Power 25 strategic plan, for which the central objective, as you know, is the delivery of the company, and the confirmation of our guidance 24 and ambition 25. On the achievements, the key achievements of Q1 24. On the revenue side, we have achieved an outperformance of 390 basic points, including one in sales. We have recorded solid order intake at 6.5 billion euros, up 1 billion compared to the last period of 23. We have achieved already 25% of our second 1 billion disposal program, And we have issued 1.2 billion of new debts, replacing existing ones in order to extend our debt maturity. And we have been able not only to do a large bond with maturity at 29 and 31, but also to come back to the full shine market. Before going to the commercial activity, I would like to highlight elements on key projects that we have. The first one is, of course, EU Forward, which has been launched in February. This is a five-year project aiming at restoring full competitiveness in Europe throughout our portfolio. I would like to highlight that the project is in good motion. We are executing properly side by side, and we are confirming all the objectives associated to it. 500 million of savings by 28, with savings already in 24, and also restructuring costs that are increasing slightly compared to our run rates, But the excess compared to the average is only 275 million over 24 to 28. And I confirm that this is all embarked in our, all our objectives and are helping to achieve them and not the opposite. We don't do these actions lightly. but we consider this is necessary in order to make sure that Europe is fully competitive throughout the portfolio. Last message, we have indeed some other capacities, but they are specific locations and specific activities, and we are addressing them in a selective manner. The second topic is about the development of our reach in China. A key element is the signature of a joint venture with Sherry in the field of smart and sustainable cockpits with a goal to develop 1 billion of revenues by 2029. And you will see already impact of this even this year and more in 2025. The interest of this joint venture is twofold. Sherry is one of the leaders of this market, and it allows to have diversification in our reach. And second, this is about working on a full cabin scope and leveraging the integrating factors that we can provide as for you. The second one is that we continue our journey on developing a sustainability offer. And in particular, in the context of sustainable materials, you know that we created this company called Materiac. We are now, in fact, in implementation mode with partnership in different geographies. You see for North America, the signature of a joint venture with a company in Texas called PCR Recycling, which is aiming at being one of the winners of this industry in that country. So the company will be called Materiax Dallas. And we have signed recently, last week, an agreement with GRI, which is a $27 billion agreement company in China to develop also new materials and application in that country. Now, moving on to more of the commercial sites and the commercial performance. So, first of all, we have reached robust order intake of 6.5 million. which is interesting in different aspects. You see that in terms of typology of activity, we continue to grow, in fact, the electronics business. 2.3 billion is on this side out of the 6.5. And you see that Asia has represented the majority of the order intake in the first quarter with something, a balance between Chinese OEM and international OEMs throughout this large geography. And last but not least, we have been able to incite this number to get a large order with a premium German OEM for complete seats, more than $1 billion. We continue to exercise selectivity in the order intake, ensuring that the profitability and the level of the front is in line with our Power 25 objectives. Now moving on to the market itself. The market is showing clearly a confirmation of stabilization overall, and it's true both in Q1, in which you see the automatic production has been down slightly, minus 0.8%, and a confirmation of a market at least of 90 million cars for the year. Inside this one, there is clearly slowdown of the electrification, the slowdown of electrification in Europe. The penetration is continuing to grow. In fact, if you take the European market, the overall market is minus 8%. But inside it, the electric cars have been stable, so the penetration of electric cars continue to grow, but not at the same pace as before. And you see that overall for the year, we continue to see a growth of electrification from 10% in 2022, 12% in 2023, and expected, according to the latest report of the S&P, at 15%, driven largely by China. Important to note for us, since we have balls on the two sides, we have developed a large electric offering, thanks in particular to the acquisition of ELA, and vice versa, with the clean mobility activity, the fact that there is a slowdown of some parts of the market in terms of electrification is enlarging the benefits of the clean mobility activity. In this context, we are posting a 3.1% increase on an organic basis, and therefore 390 basic points of performance versus the market. In terms of scope, we have a marginal impact with two elements in opposite directions. We have a negative, of course, from the disposal of commercial vehicles that we did last year affects beginning of Q4, so we have the quarter that is out. And vice versa, we have revisited the partnership with one of our partners in lighting in China, which allow us now to fully consolidate This company, whereas it was on an equity basis before, and it shows the enlargement of our ambition in China. Last but not least, we have a sizable currency effect, which is on the Chinese run, but also the consequence of hyperinflation in Argentina and Turkey, which has been particularly the case in the past. in the recent period, and therefore, in particular in H1, you have a negative effect on the Forex, meaning that on the reported basis, we are slightly down year-on-year. If I move business by business, so starting by sitting, sitting, which represents 30% of our revenues, has an organic growth of 1%, i.e., an outperformance of 180 basic points, And actually, 3% organic growth, if you would exclude the exits that we signed last year on the just-in-time activity in Island Park, as you know, which was our difficult contract in that space that we exit at the end of September. So you will see this effect for the first three quarters. Inside this one, double-digit increase in North America, driven by force. We have a marginal single-digit decrease in China, in which you have the drop of sales on BYD, that I will come back to, and vice versa. We have the ramp-up with new Chinese customers, the development of the diversification, as we knew that there was a certain dependency on BYD already last year. On interiors, we have now performance of 560 basic points. IP organic growth of 4.8%. This is driven by the development of the activity in China and the development in Europe with Renault and GLR. So it's a solid growth in this area. One positive surprise potentially is the clean mobility activity. The slowdown of electrification means that, in fact, the addressable market of exhaust systems is declining less than what people would expect. And as we grow market share and we have also the positive factor that the hybrid system is more complex and more expensive than the pure IC model, we have, in fact, an increase of our activity on an organic basis of 6.8%. And as you know, it's one of our best margins. It's not the best margin we have currently. So you see the growth by geography. Let me remind that this activity is the most balanced between the three big markets, i.e., in fact, we are able to benefit from that and sustain variations. On electronics, we have an outperformance of 390 benefit points. This is largely driven by the growth of Clarion Electronics. While, in fact, ELA electronics is penalized by the slowdown in the electrification, which is in Europe, in which there is a large presence. Last, lighting and lifecycle solutions. So lighting, we have a now performance of 210 basic points. But I would like to mention that we have a large scope effect, which is the consolidation of this HBBL joint venture in China. This company was, in fact, on an equity basis. The partner has not changed. We have revisited the agreement with them in order to maximize the development, and we are now fully consolidating, which means that we are growing, in fact, with Chinese OEM, in lighting as part of our common go-to-market, thanks to the Forvia combination. On life cycle, the life cycle continues to have a good pace. You know that this is our B2C activity in which the pass-through of inflation is a positive factor and with the solid profitability associated. So this is a good block to have as part of our portfolio. Now if I move from a regional standpoint, The overall outperformance is centered around North America and Europe. You see America's 12% increase and decrease, in fact, with stronger performance in North America, which is particularly notable because you have also the voluntary exit of Island Park that is a negative there for $40 million in sales. You have good growth in EMEA, and in particular, 440 basic points in Europe. And we say Europe, excluding Russia, because, of course, as you know, we have vacated any activity in that country. On Asia, we have actually a contrasted performance. We have, on the one side, an underperformance in China. We have grown the markets, but less. including this joint venture, but we have an underperformance. This was expected given the unfavorable customer mix, the high comparable, and the fact that BYD has revisited the market sharing in sitting. I would like to highlight in particular on China that last year we had something like a 14% outperformance in Q1, you see that mix between customers, variations of performance between customers can have impact. And I will come back to this. Vice versa, we are developing largely the rest of the region. We have stronger performance in Japan. We have development with Zonda. We have inroads in India, which is probably one of the most interesting markets from a growth standpoint outside China for the future. So this is allowing, in fact, to have an overall situation for Asia with actually an outperformance of 20 basic points. Let me move in more details about Asia indeed. So you see on the first, on the left, the evolution of our revenues in China. So we continue to grow in the country. We have, we are in fact dealing with the high comparable of last year. You see clearly the evolution of the bar between 22 and 23. And as we explained, we have been working on the diversification in order to reduce our dependency on BYD and benefit from the growth of the other actors. Last message, we have also clearly the fact that BYD has slowed down in terms of growth. BYD has increased production only by 8% in Q1, only between brackets compared to their recent performance. This evolution versus market should normalize in H2 to return to, in fact, a more balanced with the market in that period. Outside China, we are accelerating the growth, and you see the evolution. The potential is quite large with our initial positioning. I would like to highlight that we are benefiting from the acquisition of Clarion some years back, which allowed to have real presence in Japan with the Japanese OEM, and that we have been able to extend this risk with Japanese OEM outside Nissan, which was the historical customer, to Honda, Suzuki, and I would like to say Maruti Suzuki, in fact, which is one of the key players in India. And on the other side, we had also some good base. So we are able to grow this part of the cake, which was a limitation historically for our company. And on the right-hand side, we highlight, in fact, the key elements, truly the growth for the future. I mentioned the joint venture HBDL, which will be doing last year the 250 million euro of sales So you can expect growth from this one. The recently signed with sharing on the integrated cockpit offer with a goal of 1 billion cells by 29. And the sizable and diverse order intake, 11 billion last year, 3.6 billion in Q1. So we have the elements to grow in a diversified fashion in this market Now, moving to the second key element, which is traction on our Power 25 objective, which is the deleveraging and the reduction of our financial costs. And on this, two messages should pass. The first one, we have achieved already 25% of our goal on the second asset disposal, with 250 million either closed. We received the money from the sale of the 50% stake of the HTC on early April, and we signed an agreement to sell Hugues Engineering to a Belgian company called OGPAR. This is another sign of a cleanup of the portfolio on the IT footprint. This is also an exhaust system, not for car or vehicles, but more for plants and boats, and it's a continuation of what we did with the CDI disposal to come last year. So 25% achieved, and we have traction on the other five. The goal is clearly to deliver this one over 2024-2025. On the second front, on the maturities and our debt management, we have done quite a bit in the first three months of the year with two big operations. First of all, euro bonds of 1 billion with two crunch, one for 29 and one for 31. 500 million at 4.96% and 500 million at 5.37%. And the second one is a return to the market with 200 million for maturities of three, five, and seven years. This is leading, in fact, to capacity to reduce all the maturities that are in the 24-25 and continue to attack the 26 as well. And you see on the pro forma basis, the evolution of maturities further to this operation. Our goal is, of course, to work on the maturities, to work on it with good conditions, and also to reduce the growth depth, and you will see reduction of the growth depth again in H1 results. In this context, I confirmed the guidance for 24, In terms of revenues, 27.5 to 28.5 billion. The R performance that we've reached in Q1 is in the 300 to 500 range that we are aiming and that we have shown since the creation of Forvia. So we continue on this trend. Improvement on the operating margin with a range of 5.6 to 6.4% of the revenues. Net cash flow at least at the level of 223, which was 649 million euros. And as a consequence, a further reduction of our leverage. We were at 2.1 times at the end of last year. We aim to be below 1.9 times at the end of this year. And that should put us in the right track to deliver on our strategic plan for World 25, which is revenues around $30 billion, operating margin above 7%, net cash flow 4%, and leverage below 1.5 times. And this excludes, in fact, the impact of the second disposal program. So you understand that our goal is to be clearly better than this 1.5 times throughout the different operations that we have done and that we are doing. On this note, I'm ready for questions with my colleagues.

Thank you. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. To remove yourself from the question queue, please press star and 2. Please pick up the receiver when asking questions. Anyone who has a question may press star and 1 at this time. The first question is from Michael Jacks, Bank of America. Please go ahead.