Martinrea International Inc.

Good evening, ladies and gentlemen. Welcome to the second quarter 2026 results conference call. I would now like to turn the meeting over to Mr. Rob Wildeboer. Please go ahead.

Hi, everyone. Thank you for joining today. We always look forward to talking to our shareholders, updating you on our business, answering your questions. We also note that we have other stakeholders, including many of our employees on the call, and our remarks will be addressed to them as well. as we disseminate our results and commentary to our network. With me are Patrick D'Eramo, Martin Reyes' CEO, our President Fred Di Tosto, and our CFO Peter Cirulis. Today we will be discussing Martin Reyes' results for the second quarter and the June 30, 2026. I refer you to our usual disclaimer in our press release and our file documents. On this call Pat will touch on some key priorities for the business over the next few years, discuss operations, and outline some key highlights for the quarter. Fred will provide an overview of our operating segments and highlight some new business wins and growth opportunities. Peter will discuss the Q2 results and 2026 outlook. And I will conclude with some brief comments on trade geopolitics and capital allocation. To kick things off, here's Pat.

Thanks, Rob. Good evening, everyone. I want to start by providing an update on how we see our business unfolding over the next few years. We have a three-year strategy that we update annually where we lay out key priorities. These include focusing on margins and free cash flow, growing our core automotive business, partnering in regions that have more risk or where we don't have scale or other competitive advantages, and limiting our investment in those regions. Growing our non-automotive business, and ensuring our investments are successful. I'll take a moment and elaborate on each of these, starting with margins and free cash flow. We continue our strong focus on operational excellence, driven by our lean manufacturing principles. This continuous cost reduction and AI machine learning installations across the plant network will be key in driving margin expansion. If we enter 2027, We'll be intensifying our plant-specific performance targets with a view on consolidating or exiting underperforming operations where appropriate. We are targeting an adjusted operating income margin of 6.5% to 7% by 2028. And these are the levers we will pull to get there, by also getting some help from projected better volumes and the move to next-generation programs where we can reprice the business to meet our expected hurdle rates. We will maintain our capital discipline in line with our previously communicated framework of CapEx roughly in the line with depreciation and amortization. Improved capital efficiency should flow naturally through better operating performance, resulting in even stronger free cash flow. Moving on, we foresee good growth in our core automotive business based on recent new business wins and strong performance at our customers. We are seeing a high level of coding activity where we can be selective while growing at a faster pace than the overall market. Fred will elaborate on recent new business wins in his remarks. As always, we have a relentless focus on quality, which is a big part of what's helping us win new business. We are being recognized for this as evidenced by more than 30 awards we've won from customers and industry organizations last year alone, in areas including quality, Thank you for joining us. and other markets that comprise our rest of the world segment. Aligned with this strategy, we reached an agreement to sell 85% interest in our fluids plant in China, partnering with a local Chinese supplier. And we're looking at other potential dispositions of non-core assets. During the non-automotive markets, we continue to see growth in our industrial business, with both our core customer base as well as new customers and new market verticals, such as power generation and defense. We also recently entered the school bus market through our acquisition of Lyceum North America, which we now call Barton Ray at Tulsa, and see strong growth prospects in this business. In addition, we have a meaningful book of heavy truck business. We spoke on the last call about True North Kaizen, our lean consultancy business that we recently launched. We've already won a few contracts in defense and aerospace, to work with them on improving manufacturing throughput on some key defense products. Thus far, in a short period of time, we've had a lot of success helping them, clearly demonstrating our strength in how we approach operations. This success is expected to lead to more business opportunities for True North Taizan. We expect to sign more contracts at True North, which could expand the business by as much as four times by the end of 2026. The business has significant room for growth, and we believe that over time, the relationships we forge through True North could lead to opportunities to participate more directly in the defense manufacturing business. Importantly, True North is a higher margin business and was profitable in its first quarter of operations. Similarly, our MindCan software subsidiary continues to see steady growth with an expectation to be profitable in 2027. This is great progress for a new software startup. As you can see, we are diversifying the business into markets with attractive growth prospects using existing skill sets, capabilities, and equipment, and for very little to no incremental capital investment. That dovetails nicely into our final pillar, which is to ensure investments are successful. The strategy here is to invest in new technologies and capabilities that can be a differentiator for our business and support those investments with resources including human capital. The strategy also involves monetizing certain investments that have completed their incubation period and are self-sustaining. Now let's shift to the quarter. I'll be brief, and Peter can fill in the details. We're pleased with our Q2 performance, considering the impact we had from lower volumes, including lost sales from the Ford Escape program, which ended at the end of last year, negative forward exchange, and higher aluminum costs, which is expected to reverse at some point. As we have articulated before, aluminum costs are a pass-through to our customers, though the pass-through occurs at about a 90-day lag. Given the spike we saw in the aluminum prices because of the Iran conflict, We had to absorb some extra cost in Q2. We expect to recover the amounts in the coming quarters as prices normalize, with the timing dependent on how the Iran conflict plays out. The good news is volumes were up quarter over quarter, and we were able to offset cost pressures, including aluminum costs, their operating improvements, and commercial recoveries. This allowed us to also improve margins quarter over quarter. Overall, based on our performance in the first half of the year, and considering the various puts and takes, we're confident that we will meet our 2026 outlook. We're on track. Peter will elaborate on our financial results and our outlook. With that, I'd like to thank the Martin Rea team for all their hard work and ongoing commitment to make this business better every day. With that, here's Fred.