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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.

Hi. Good morning, Olivia. Thank you for the presentation. I'll start out with pricing. What was the contribution in Q1 from inflation compensation? And then perhaps linked to that, some suppliers have reflected that compensation for wage inflation in 2023 was received mainly through lump sum payments, which means that 2024 negotiations needs to cover more than just current year inflation. Is this also the case with fovea, and how confident are you that this can be achieved? And then one final question. I know you mentioned Ford, but could you please provide a little bit more color on the strong outperformance in North America? Was this driven by any specific program, or is it more a rebound in production by Ford in general? Thank you.

Thank you. Good morning. So on the inflation, so the inflation recovery and contribution in Q1 is something like 60, 70 basic points inside this 390 basic points about performance. On the recurrent, non-recurrent aspect and the difficulty to recover inflation, this is clearly a topic for all the suppliers. So let's be very clear. We are organized to make sure that we are recovering the inflation. It's not easy. It's a daily discussion, case by case, but this is clearly a focus area, and we are starting all our business reviews with our different business groups by the inflation recovery. On the recurrent and non-recurrent, you have, in fact, the two situations. You have some lump sum agreement. You have some recurrent agreement. And you have also cancellation of what existed before, which were LTAs. LTAs means annual price reductions. So you have a combination of the three, which we understand that, of course, the two parties have different views on this. The reality, we have to get it. Two other messages maybe to pass on this. Number one, EU Forward is about reducing our cost base. So you understand that reducing our cost base is also to recover the impact of inflation on our side. And the last message is that in terms of salary inflation, This has been so far lower than last year. Let's see what happens in 2025. But the level of salary inflation we are facing has started to moderate. On NAO overperformance, it's quite a lot related to start the production of new programs more than strictly a market boost.

Okay, very clear. Thank you.

The next question is from Jose Azunendi, JP Morgan. Please go ahead.

Good morning. I'm Jose Azunendi, JP Morgan. Three topics. The first one, can you elaborate a little bit more where are the excess pockets of capacity in which region and roughly which products so we can understand it better? the plans to adjust capacity. Second, are you confident on offsetting the labor cost increases with productivity gains in 2024? Or do you think this is going to be a topic that you will be tackling more in the second half of the year. The question is more, are you making progress in the first half to offset those level cost increases specifically? And then three, if you can please comment on how you want to improve the outperformance to global production, specifically in seeding, and also in China, what path to improve the outperformance into the second half of the year? Thank you.

Good morning. So on the overcapacity, so really I would like to stress the message that they are in specific location and specific type of activities. So you have, it's related also to the nature of the business. So we have some overcapacities in some parts of interiors. because those are big machines and also quite a bit dedicated to a specific model or group of models. So if there is adjustment in the level, this has an impact. So that's why we are addressing the specific cases and the specific countries. It's not exactly the same everywhere. The other overcapacity we have is obvious, which is the clean mobility exhaust system. The fact that the electrification is slowing down in Europe does not slow us down on our side. So we are executing the restructuring action, and since the size of the individual clean mobility exhaust systems sites are limited, This is actually easier to do, and we have already initiated some in Q1. So clean mobility, obvious. The rate and pace of electrification can vary, but the driver of the adjustment is related to the number of engines and the number of engines. As happened, so if anything, it is helping us to convert in cash this activity. So we will do... a total update on EU forward in the publication of H1 showing the action in terms of sites and giving you more elements and more details on the specific overcapacity. But once again, this is not a general situation. And on the LAPARP, A lot is relating, first of all, to ensure that we do not increase headcounts and costs. So we have across the company and across the whole company, we have recruitment fees in Europe, and this is why I'm saying that the plan is reaching already savings in H1 because you don't need a restructuring measure. It is, in fact, avoiding costs. on the inflation recovery. you will see a seasonality between H1 similar to last year. I would like not to have it, but this is a reality of the commercial negotiation. We will have more recovery in H2 than in H1, and it will participate to a seasonality of our operating margin between H1 that probably will have a similarity to what you have seen last year in 4 years. Clearly, we are taking the measures to limit that, but today this is what I see, and vice versa. We don't want to do a deal that will be nice on H1, but then bad midterm. On the last question, just to be sure, Jose, you want some color on the outperformance in sitting in China. That's correct?

Yes, it looks like those are the two pockets here. For phobia, we can accelerate an improvement in the second half of the year or between Q2 and the end of the year. So it will be great to get a bit more color if possible.

Thank you. So maybe let me start with China. The China activity is more diverse than it has been in the recent past. BYD, a bit less activity recently. as a consequence of evolution of market share on the seeds. That was known and agreed with them. The impact is probably a bit more than what was expected before, given the evolution of production of DYD for the beginning of the year. That reinforces the benefits and the logic of what we have done, which is to develop with the other ones. We have doubled with Lyoto. And we continue to grow. By the way, Lyoto is one of the customers inside the HPBL Lighting joint venture. We have this joint venture agreement with Sherry, which I think is the first time that we have an agreement on a combined... cockpit of the future strategy with a given customer, highlighting a different approach that the newcomers are taking in particular in this part of the world. And the speed of China being what it is, there will be already some impact in revenues this year, which is quite interesting. So H1, we will have, in fact, a situation in Q2 probably similar than in Q1, and we will have a rebalance versus market in H2. The expectations on the China market as a whole are fairly steady. I think the export is playing quite a bit inside. And, of course, our goal is not only to work with the Chinese OEM in China, But to work outside China, you know that we have Thailand with BYD. You know that BYD is having a fairly clear and advocated plan in Hungary, in Brazil, in Mexico. And we know also that other Chinese orients are considering also sites in Europe. I know at least two with whom we are negotiating. The development of the China OEM offer is not only about China. It's actually not only about Asia. It's also in Europe, which is interesting in terms of reusing our people and capacity. So a possible improvement on this one, which is a bit of a factor of the evolution of the market over there. On sitting, yes. You see, for instance, the other impact that we got in sitting. We are making sure that this is with good condition financially. So for me, the outperformance and the growth in sitting is by far not the only one that I'm focusing on. What is important is that we are continuing to develop the electronics activity and that we continue to progress on the improvement of the operation performance in city and in interiors. So our performance grows, yes, but we have to ensure that we are delivering the bottom line. And we know that in sitting and probably even more in interiors, we still have work to do. Thank you so much.

The next question is from Sanjay Bhagwani, Citi. Please go ahead.

Hello. Thank you very much for taking my question also. I have two questions as well. My first one is on organic growth and performance. I understand that you mentioned there's roughly 530 basis points of getting growth out performance from volume mix and pricing. Office 60 to 70 is pricing. So just the volume mix, somewhere around 460 basis points, which I think is very strong despite a challenging Q1 last year. So can you maybe provide some color on how this develops into the next few quarters? there is outperformance on volume mix. And then how should we think of the pricing overall in the outperformance? Could this be more towards zero? Given base inflation will be positive contributor, but then the commodity is still negative. That is my first question. And my second question is rather on confirmation of the guidance.

So I understand you do not... Hello? I'm sorry, but the line is Can you repeat your first question? I could not hear it.

Okay, sorry. I'll just repeat my first question. So my first question was that a Q1 organic growth outperformance of volume price makes somewhere around 530 basis points and pricing is somewhere around 60 to 70 basis points. So just the outperformance from volume and mix is somewhere around 450, 450 basis points. So I wanted to know if you could provide some color on how this progresses to the coming quarter, given that we understand that the Q1 last year was very high comp. And on that, how should we think of the pricing in the next few quarters? Could this be net net zero or given the wages go up and then other parts of the commodities come down because of the indexation? So that is my first question. Sorry, could you hear me?

Yeah, yeah, sure, sure. I hope I get it right. I think your question was about our performance of revenues in coming quarters and in particular in relation to commodity price evolution and there was also a question about the conversion of this in operating margin. So on the revenues overall, we have achieved in quite all the last quarters, and our performance between 300 and 500 basic points. We expect this to continue with potentially variety between geographies, as you have seen in Q1. But the overall running trend is there, and the slowdown of electrification that we see is slowing down some of the growth on part of the LA portfolio, as you have seen, and vice versa. There is a large offset of this through the clean mobility activity. On commodities, we are seeing some variations on commodities, up and down, actually, and you see, in particular, The oil price, you see that the brand has come up quite a bit in the recent period. Now, it's also, I have seen, I don't know today, but yesterday was going down, and of course, it's related to the geopolitics of the Middle East. The impact for us is with a lag because of the type of oil. of agreement we have on the supplier and on the customer side, but today we are expecting net-net impact, not much impact overall commodities because you have some others that are going down, and let's see about semiconductors. On the profitability, the evolution Maybe two things to mention. The first one is that the evolution year-on-year is driven a bit by the outperformance because we are on a stable market. You have, after the contribution from the exit of this toxic just-in-time contract that we had in Island Park, which is providing a positive evolution, You have the synergies, and the synergies impact for this year is around 80 to 90 million euros year-on-year. And you have the add-on benefit of the implementation of EU forwards, which should bring between 30 and 50 million in operating margins throughout the year. The mix between H1 and H2 contracts on inflation plus on the timing of some of those savings will mean that you will have a seasonal effect on the level of profitability. You have seen that last year, and I think you will see something of the same magnitude this year. So H1 profitability will be lower than H2 profitability as we had last year. I hope I covered the first question, and I understand you had a second question.

As a reminder, if you wish to register for a question, please press star N1 on your telephone. The next question is from Christophe Lascaoui at Deutsche Bank. Please go ahead.

Good morning. Thank you for taking my questions as well. The first one will be on SOPs which are slightly below You mentioned that proceeding. Do you experience that in other divisions as well? And what's the visibility on that improving going forward? Do you think it's more like supply chain related, but it's slow right now, or is it demand driven as a first question? Thank you.

Good morning. I think the SAP delay is not so much on supply chain. So there were events in Q1. We have seen what happened in the Red Sea Straits. But in fact, the supply chain is more resilient than before as a whole. And a case like this one, flows are diverted quite quickly in the case of the Red Sea Straits. going through the Africa continent between coasts costing 10 days. So there was a little bit of impact, but it's quite marginal. We have not been the cause of any impact for information, but on the overall, not much. And there was Baltimore, but Baltimore has been not much as well. So I think... The level of difficulties, stop-and-go shortage of semiconductors, it's not zero, but it's, I think, more normal and fair level. So I don't think this is the cause. The cause of the delay is, I think, more demands and variation of choice of some of the carmakers. I anticipate that this will continue to have some impact. On electrification strictly, you see the slowdown in particular in Europe and in North America. In Europe, it has been largely driven by the changes on subsidies in some countries, particularly Germany. So it has had an immediate effect. Probably some of this will continue for a while, but the electrification penetration continues to grow. A question is how the carmakers will face the evolution of the CAFE regulation threshold. You know that the threshold is changing next year with a sharp drop on the road towards the full ban by mid-30s, mid-35s. Some of the car makers have been clearly saying that in the current level of electrification of their cells, they will have to pay sizable penalties. Either they pay penalties or they will adjust the pricing and the commercial strategy in order to increase the volume of electric cars being sold in Europe, plus fight the competition of the Chinese. My take is that the slowdown of electrification is a temporary thing, at least for 2025, and let's see about the rest of the year in 2024. What is important for us is do we have goals on the different situations? You know that the vast majority of our portfolio is agnostic to board trends. but we have activities related to electrification in particular in some parts of electronics plus lighting and vice versa. We have clean mobility on the non-EV side of things, and the offset is probably a bit negative on revenues, but on profitability, given the profitability of clean mobility and the actions we do in restructuring, it's probably a neutral effect. or close to at the bottom line. And I think that this is what is important for us, given the volatility on the rate and pace of electrification.

Thank you. And second question, just on the disposal program and what's still open to the next $1 billion. Should we think about that to be covered with several smaller transactions, or should there be one bigger one making up for most of the chunk that's left?

Thank you. So you see that we have done 25% in six months. I think it's a rate that is not so bad in the context overall for this. You can expect a variety of operations. We expect a sizeable one. And we expect some other ones to complement. So it's a bit of a combination. And as we mentioned, the impact on the consolidated numbers is expected to be marginal, given that some of the operations are more capital opening than strictly selling. The goal in this is, of course, to do operations to reduce our debt, which is the central goal, but is also simplifying the portfolio. And to do it at good condition, the 25% that we have just done is leading to a capital gain of more than $100 million. So we continue, in fact, to sell assets for a profit. and I think we are making sure that we remain overall in this situation. So it takes a bit of time on some of it, but the prospects are there. We just need to solidify this and to have, let's say, the carve-out and all the financial aspects being organized so that the transactions can be executed. Thank you.

If you wish to ask a question, please press star and 1 on your telephone. The next question is from Sian Keegan with Goldman Sachs. Please go ahead.

Good morning, and thank you for taking my questions. My first question is in relation to the seating conquest you cited. I was just wondering how much of that €2 billion is related to that contract, and can you give us any indication on the timing of the SOP? And then also, what was the principal differentiator that enabled you to win that contract in your view? And should this help you in further contracts in this area? And then secondly, just quickly following up on the SOP delays, are you able to quantify the impact at all? Thank you.

On your first question, you are talking about the major award that we mentioned in sitting, correct? Yeah, correct. So this one is... is a large premium German OEM, more than $1 billion, complete seat. So the usual conversion in SOP for this is a two-year range. And the duration of the model is five to seven years, so I think you can give the idea of the revenue aspect. Maybe one thing to mention on our order intake recognition, we try to take always the edge on the level of the order intake compared to customer expectation, as we know that not all cars will be at the same level of success, otherwise the market is much more than 90 million. So we take a cautious approach. a cautiousness, a contingency on the level of order intake that I'm mentioning, just to put this in perspective. Can you repeat your second question? Sorry.

Yes, sure. And that was just quickly on the SAP delays that you've kind of spoken to before. Are you able to quantify the impact at all?

I think the quantification for Q1 only, it's in the 100, 150 million range, so it's something like this.

Okay, thank you very much.

Mr. Durand, there are no more questions registered at this time. I turn the conference back to you for any closing remarks.

So thank you for this call this morning. So you see that we continue to have our performance in the market. We continue to have it in a diverse fashion. We are developing the Asia activity in a diversified portfolio of customers and moderating the dependency on BYD. And not only in China, but also in the rest of Asia, which is 22 million vehicles, on which our market share is, of course, lower. So the potential for expansion with Japanese OEM, with the Indian market, is there, and we are geared to seize some of it. But at the end, the focus of the company is on deleveraging, and that's why it's very important that we have traction on our disposal program and our financial costs and maturities in our debt. And we confirm that we are in the direction to achieve our Guidance 24 and getting the Strategic Plan Power 25 executed in all its metrics. Thank you.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.