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Good morning. This is the conference operator. Welcome, and thank you for joining today's Forvia Q3 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. At this time, I would like to turn the conference over to Mr. Olivier Durand, Group Chief Financial Officer.

Please go ahead, sir. Good morning, everyone, and welcome to Forvia Q3 sales presentation. I'm here in Nanterre with the investor relations team and Sandrine Doram-Lanchard, our Deputy CFO. We will present this morning, of course, results that are largely in line with our communication of late September. Let me start first of all with a short update on the environment. The key elements have not changed. The environment remains challenging with two clear elements. One is the pause of the electrification, and the second is the significant production decline that we see in H2-24. On the electrification, Clearly, this year has been showing a slowdown and even a stop of electrification in Europe and North America and a slower increase in China. We anticipate that next year we'll see some evolution more towards a rebound of electrification in particular in Europe on the background of the CAFE regulation with the new threshold that will be applicable for the next five years. The dimension of it is still an open question that we will see evolution in the next coming months, and we will come back to this in our annual publication when we give our guidance of 2025. The second element is the production itself. We have clearly a reduction in the second half by around 4%. and on the background of the high inventories in North America and several startup productions that have been delayed from a production standpoint. Those elements were identified in September. They remain valid, and the latest IHS S&P information has not changed anything in this direction. Now let me come back to the news about Forvia itself. First of all, in terms of order intake, we continue to enjoy strong order intake. The first nine months have showed 20 billion euros of orders, and we have been able to obtain those ones on a selective basis, selective in the content, selective in the profitability, and selective in particular in the need of reduction of the upfront cost, which is a key element in the better conversion in cash of our results and activity. You see that we are clearly in the direction of reaching the $30 billion we anticipate for the year, and you see a little bit key elements about where they come from. A lot comes from Asia, a lot from electronics, and a lot of premiums. And let me highlight a few key awards of the period. We got our first award with Xiaomi, Xiaomi is one of the key telecom companies entering now the EV and the car market, and it's very good that we are able to extend our reach with Chinese OEM, also with the latest ones including it. We got a major award with Volvo in the interior for 300 million euros. And we see a renewal of the commercial activity in clean mobility, ultra-low emission, and you see some of the elements and the highlights of the period. It clearly shows a sign of the development, the continuation of hybrid solutions in the context we see on the power trains. It does not mean that there is a renewal of engines, but there is a continuation of the flow, which is encouraging for this key cash core of the group. Now if I move to the actual sales activity of the quarter, let me first start with the overall picture. We have enjoyed €6.4 billion of revenues. This is an outperformance of 420 basic points compared to the market. And this is happening as follows. Organic growth Organic growth minus 0.4% versus a market that was down in the period. And then we have two negative effects related to scope and currency. The scope is negative for the last quarter. We sold activity to Cummins on the commercial vehicle spectrum, which was having still revenue, therefore, in the first nine months of last year. And vice versa, we have the positive of the consolidation of activity in HBBN, in lighting in particular, with LiO2 in China. And on the currency, this is related to the different evolution of the currency in the period. Not only the major ones, but also some secondary ones on which hyperinflation is applicable. So the exact number for the period has been 6,357,000. million of revenues. Now if we go business by business, I will start with sitting, which represents one-third of our activity. We have strong organic growth of 4.9% in this business. This is driven by the growth in Europe and in North America, so we continue to ramp up and to improve the sitting business. This is even more interesting given that we had last year still activity on the contracts in Grand Wagoneer that we transferred in agreement with Stellantis at the end of September of last year. So the comparison is even more favorable. On interiors, interiors is also showing Strong organic growth, 5.9%, basically 10 points of overperformance. This is related to the strong activity in particular in North America and also in Europe. This is also including significant tooling sales, in particular related to the new startup productions that we have, which is contributing to this above the average outperformance this quarter. Clean mobility. So clean mobility is reflecting an underperformance in the period. We have a decline of revenues by minus 10%. Three quarters of this is related to the reduction of activity of Stellantis, which is a which is well known on the back of also the reduction of inventories that the customer is driving. And this is also related to the drop in activity in China with electrification. So I would say that this level of reduction is more on the high side compared to what we can expect in this business given the electrification evolution. Electronics, we have, in fact, some outperformance, and even if the slowdown of the electrification has led to a lower activity than we could expect a year ago. You have North America, which is going with the GM. You have outperformance in Europe driven by Volkswagen. And you have, however, a negative customer mix in China. We'll come back to China when we look at the regional picture. And last but not least, lighting and lifecycle. So lighting is, in fact, with a growth of 6%, including the consolidation of the HBBL joint venture in China that Ella has. If you look at it from a pure organic perspective, we record an up performance even if the growth is minus 1.4%. This is related in particular to the delays in startup production in several places, in particular China, U.S., mitigating the growth that we have in Europe. Life cycle, the last activity, a smaller one, but a good cash cow, however. The organic growth is negative in the period. It's reflecting the specific investment cycle in the special original equipment activity, which is currently happening, so there is a timing effect in this growth on these activities. I will now move to the regional picture in page 9. Europe and North America are driving the market performance this quarter. We have a strong one in Europe, a very solid one in America. Europe, you have seen that in city, in interior, in lighting. And America, this is on the back also of not only entire density, but also electronics. In Asia, you have two different pictures. You have China that is still with, in fact, another performance. This is related to the mix of customers that we have and also the delay in startup production in different customers. Let me say, however, that the diversification that we are doing will be paying off and that we confirm that we will have outperformance returning in China by at least 300 basic points in 2025. Related to Asia outside China, the organic growth is quite solid at 4.5%, which is an outperformance of around 10 points. And this is driven by the development in Japan on the more diversified customer base and also entry in other places, including India, which is encouraging for part of the plan we have, which is west to east, which is not only about developing China, but it is just as much to develop the rest of the region where historically our presence was limited, but now we have the capacity to expand. So in summary, in our performance of 420 basic points, which is inside the corridor that we enjoyed since the creation of Forvia, between 300 and 500 basic points. Now, if I shift to expectation, I will start by page 11. And, of course, we confirm all the messages that we passed in the call we had in late September. So, first of all, we confirm the guidance we have provided related to 24 in the context of this lower production outlook with 26.8 to 27.2 billion euro of revenues, operating margins between 5.0 and 5.3% of sales, a net cash flow of at least 550 million, and a leverage at 2.0 or below by the end of this year. We confirm also that in this context, we accelerate the initiatives we have to improve the performance with impact clearly in 2025. We have three main activities in this regard. Number one is west to east. It's to enhance our relationship with Chinese OEMs. It's also to expand outside China and to see the opportunities of the development of the rest of this region plus the fact of our growing intimacy with both Chinese and Japanese OEMs. We are already the fifth largest Tier 1 supplier in China, and we will resume our performance of at least 300 basic points in 25 in that country on the backup of the ramp-up of the activity with Sherry and the growth from the SOP that has been delayed recently. We also continue to expand our activity with Chinese OEM outside China. You know that we have with BYD a good cooperation starting in Hungary, but we have been also selected now for the second location that BYD has taken in Europe in Turkey. and we continue to enjoy in this region out of sustainable margin in a double-digit range, which is accretive to the group performance. The second and the third initiatives are both in the same direction, which is a reduction of the cost of operating in the business. First of all, EU Forward's We had announced this plan early this year. We identified clearly early that there was a need for rationalization of footprint and activity in Europe. And we are able to say that we are not only on track on this plan, but we are able to accelerate compared to the initial expectation. We will have, by the end of next year, More than 50% of the head contradictions already done with 5,500 people who have left the group in Europe. We expect a cumulative positive impact of 180 million in the PNL of 2025, mostly next year. And we target to have this plan largely executed earlier i.e., 90% of the head contradictions announced by the end of 2017, giving us around one year advance compared to the initial plan that we had when we announced that in February. The second element is to continue to benefit of synergies of the combination between FORPIA and ELA. We are able now to anticipate 400 million of cumulative cost synergies by the end of 2025 compared to the starting point. It means that we expect between the two around $300 million of cost reductions in the P&L of 2025, i.e. a full one point of self-help in the context in which we are. Last but not least, Of course, our central objective is to reduce the debt and reduce the leverage. The target of 1.5 times of leverage net debt to EBITDA is unchanged. This will be on the back of two elements. One is the improvement of the conversion in cash flow, and second, the completion of the second disposal program that we launched a year ago. On the first item, the cash flow will improve significantly year-on-year on the back of the improvement of the EBITDA given the cost reductions we are working on. And second, by the improvement in capex and capitalized R&D that we derived to below $2 billion, which means that not only the cash flow will improve in value, but will also improve on quality because the improvement between this year and next year will not come from working capital. It will come from IBDA, CAPEX, R&D capitalization. And, of course, the complement to reach the 1.5 times in leverage will be the completion of the second disposal on which we are working and in which we have traction on some of the key files. So in summary, we are in line with the message we passed in September. The Q3 revenues are showing that we are continuing to have our performance, and commercially we are able to reach the level of order intake, which is in line with our expectation in a selective domain. So we are on track to realize the objective of this year and to get the leverage down to 1.5 times next year. On this note, I'm ready for questions you may have this morning.

Thank you, sir. 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 one on their touch-tone telephone. To remove your question, please press star and two. The first question comes from Jose Azumendi of J.P. Morgan.