Good afternoon, ladies and gentlemen, and welcome to the Linamar Q4 2023 earnings conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, the eighth of March 2023. I would now like to turn the conference over to Linda Hasenfratz, Executive Chair and CEO. Please go ahead. Thank you. Good afternoon, everyone, and welcome to our fourth quarter conference call. Joining me this afternoon are members of my executive team, Jim Jarrell, Dale Schneider, Roger Fulton, Mark Stoddart, as well as members of our corporate IR, marketing, finance, and legal team. Before I begin, I'll draw your attention to the disclaimer that is currently being broadcast. I'm gonna start off as usual with a review of sales, earnings, and content. Sales for the quarter were CAD 2.1 billion, up 34% to last year on recovering markets and market share growth. That took sales for the full year to a new record of CAD 7.92 billion, more than recovered from the pandemic, which is fantastic to see. Normalized net earnings for the quarter were CAD 99.5 million. Earnings are up 69% over last year on stronger sales despite massively higher costs, a lack of subsidies in comparison to prior year and higher SG&A and fixed costs supporting our growth strategies. Normalized EPS of the year was CAD 6.26, reasonably flat to last year, with a strong back half basically offsetting a tough first half in terms of earnings growth. Not bad for a very tough environment in terms of cost increases. Our industrial segment had a great quarter, with sales significantly up at both MacDon and Skyjack on stronger markets, market share growth, or better pricing or in some cases, all of the above. Strong sales growth drove strong earnings growth compared to a tough quarter last year, despite significantly higher costs related to material and labor challenges. Of course, results were enhanced by our Salford acquisition, which is performing really well. The mobility business had a strong quarter on the top line, thanks to a very strong launch performance and market growth, as well as increased pricing related to cost recoveries, partially offsetting associated increases in material, labor, and utility costs. We continue to work with our customers globally to try to recover some of these massive cost increases, which are really dampening our earnings growth. We also felt the impact of our Mills River foundry acquisition from our JV partner, moving this loss-making facility into operations versus it being globalized last year. We have a plan in place we are steadily executing on to bring this facility to profitability inside of the next 12-18 months. The industrial segment had an excellent quarter on both the top and bottom line, with both our access and agricultural businesses seeing strong sales and earnings growth on stronger markets enhanced by market share growth. The inclusion of Salford this year also enhanced results. These businesses saw strong performance despite significant cost issues related to higher labor and material costs. We saw growth in content per vehicle in every region this quarter, which was excellent to see. In fact, we hit a new annual record for content per vehicle in both North America and Europe at more than CAD 230 and nearly CAD 100, respectively. Launches are a big part of that, as was our Mills River acquisition for the North American figure and vehicles we have high content on being selectively prioritized for build by our customers. Customer cost recoveries played a role as well, more so in Europe than in North America. Commercial and industrial sales were up 60%, with growth at both Skyjack and MacDon on market growth and market share growth in key products. Salford also played a role in growing sales in this area. CapEx continues to scale up, supporting our global launches. We have a significant book of business to launch, and we'll need to continue to invest at higher levels to support that, particularly given we've had subnormal levels of spending during the pandemic years. 2022 was up significantly from 2021, though just under our normal range as a percent of sales. 2023 will see another increase from 2022 levels, taking us back into our normal range of 6%-8% to drive double-digit growth. Free cash flow was up CAD 68 million in the quarter on strong earnings despite heavier CapEx. That takes us to CAD 94 million in free cash flow for the year. Another year of positive free cash flow, our 10th consecutive year as such. 2023 will also see solidly positive free cash flow. We have CAD 1.3 billion of liquidity available to us, which is also excellent. Net debt position improved in comparison to last quarter, thanks to that good cash flow, despite continued activity in our NCIB. Leverage remains very strong at just 0.42x net debt to EBITDA. We purchased 70,000 shares back under the NCIB in the fourth quarter for a final total of 3.97 million bought back under the program. We do not currently have plans to renew the NCIB, although of course, if our share price starts to get under pressure, we won't hesitate to do so. In the interim, you will note we have increased our dividend by 10%. Our strong balance sheet and liquidity means we have the ability to continue to pursue acquisition opportunities as they arise in the dynamic market and drive even more growth. Let's turn to a quick update on some of the headwinds we're facing at the moment around supply chain issues, energy costs, logistics costs, and labor shortages. This slide, I think, gives a really good high-level summary of the issues and their current status. We're seeing improvements in several areas. For instance, chip shortage shutdowns are becoming less frequent. Shipping costs are decreasing and even normalized in some regions. Commodity prices are declining. Supply chain availability improving in some areas, but still a challenge in others. Energy costs have also improved compared to last year, but do remain above normal levels in Europe. Labor availability continues to be a challenge, primarily in North America and Europe, and most acutely in the U.S. Looking more closely at a few of these areas, you can see on the chip impact, the predictability of volume loss has really improved. We saw 660,000 less vehicles built in Q4 regarding chip shortages than was planned at the beginning of the quarter. That compares to much higher figures in earlier quarters and a significant impact that we saw in Q4 of 2021. That doesn't mean everyone has the chips they want. It just means they're planning less builds and getting surprised less, which is a good thing for volatility, which is very disruptive. Chip availability is improving somewhat with additional capacity that's come online. More meaningful capacity comes online throughout this year and next, which will further augment vehicle build levels and satisfy the deep backlog needed to refill the pipeline of inventory on dealer lots. You can see here trends for the commodities that most impact us at Linamar. We're seeing good improvements and reasonably stable conditions in almost all of these key commodity areas. We continue to see issues in the ability of suppliers to meet demand, notably on the industrial side, which impacts not just cost, but our ability to meet production needs for a rebounding market. It's also very disruptive on the product productivity side, which is part of what is driving the labor costs up. The issues are starting to improve at MacDon, as illustrated by this chart showing completed header production picking up, but we aren't fully out of the woods yet. Skyjack is also seeing in general a positive trend. The problem is, for each of MacDon, Skyjack and Salford, even with overall less issues, we continue to see some chronic issues repeat. The bottom line is, if you're missing anything, you don't have a product you can ship, which is frustrating to the teams. Ocean freight costs are a good news story, with Asia lanes basically back down to pre-COVID levels and Europe finally trending down as well. Energy costs have also started to normalize, which is great to see as Europe finds new sources for fuel. Both gas and electricity prices have backed off the exceptional highs that were seen late summer last year, but are notably still about triple historical levels. We're seeing a mixed level of impact in our plants on the energy side, given some plants in some regions have locked in some energy contracts before levels really escalated, which have now expired. Other plants and regions were on the spot last year and therefore are seeing an improvement to energy costs. Overall, despite improvements, we do expect to see energy prices higher in Q1 of this year than we saw in 2022, which will put a bit of extra pressure on mobility performance until we can negotiate pass-throughs with our customers. We're continuing to see a real shortage in availability of labor. Acceleration of retirements, just more jobs being sought to be filled, insufficient immigration in some regions, and lingering effects of COVID on the number of workers are some of the issues. This puts pressure on costs, of course, both in terms of wage inflation, but also in terms of higher recruitment and retraining costs. Unfortunately, wage inflation is not something that would be considered transitory. To summarize on the challenge side, higher labor costs likely here to stay, energy definitely still weighing on results, shipping costs and commodities tapering back and better supply of chips continuing to build. The fact that some of these higher costs are not transitory means we must seek cost recoveries from our customers, and we continue to diligently pursue such. We've had some success in recent months to offset at least a portion of the cost. We continue to pursue added relief. I'll now turn to market outlook. Market demand is continuing to look good, with growth in most regions and businesses expected. Supply chain issues do continue to constrain industry's ability to deliver on that demand. It does feel a little less volatile than last year. Turning to the specific markets, industry experts are predicting growing light vehicle volumes globally this year to 15.1 million, 16.6 million and 48.1 million vehicles in North America, Europe, and Asia, respectively. This represents mid to low single-digit growth in each region. Semiconductor chip supply, other supply chain issues and sporadic China pandemic-related disruptions continue to create volatility in customer schedules, putting predicted volumes at risk. Industry experts are predicting on highway medium heavy truck volumes to be flat in North America and Europe this year, but up in Asia after a tough couple of years. Industry experts predict double-digit growth in the access market globally this year, with North America and Europe expecting high single-digit and Asia low double-digit growth. Lastly, the agricultural industry is predicting growth in the combine draper header market this year in mid-single digits in North America are reasonably flat in other parts of the world. The windrower market will also see single-digit growth globally this year, driving mainly out of Europe and Australia. North American high horsepower tractor retails are expected to be up 5%-10% in 2023, flat in the rest of the world and EU versus last year. Looking at a little more detail on the auto side, you can see inventory levels in North America have settled in around 36 or 37 days over the last few months, but are still well below historical levels. Refilling the pipeline of vehicles will still be a major priority for the automakers and will take some time to get done. In looking at production levels compared to what was forecast at our last conference call, you can see a slightly stronger Q4, basically all driving out of Asia as China tries to catch up on lost production. Q4 ended at 21.9 million vehicles, up from 21.2 million. Q1 is forecast to be a little softer than both Q4 actuals and what we were expecting on our last call at 20.4 million units, largely on declines in China that are COVID related post their reopening. Looking at the access market, you can see first that all three regions showed good double-digit growth over prior year in Q4 and for the full year. Rental demand is strong as companies look to counter fleet aging experienced during COVID. Utilization in North America slowed a little during Q4, tracking a little closer to 2021 levels than pre-pandemic. Utilization levels in Europe continued to trend above both 2019 and 2020 levels, basically in line with 2021. Our backlog at Skyjack is up significantly from prior year at nearly 40% improvement, thanks to continued solid market demand. Delivery of orders is being impacted by supply chain challenges. However, as we work through these issues, we feel confident we can again grow Skyjack in double digits this year. We are of course keeping a close eye on potentially shifting market conditions in the event of an economic slowdown. In the agricultural business, Q4 combine retails in North America were up 43% over prior year, a huge pickup versus earlier in the year. The order book is up over last year, but meeting demand is a continued challenge for MacDon regarding supply chain and logistics issues and is the limiting factor to growth as opposed to demand. That said, our current forecast is for double-digit growth this year, again at MacDon. North American high horsepower tractor retails were up 10% in Q4, which is a good indicator for Salford's market segment. Salford is seeing a strong backlog in all products well up over prior year and is also predicting double-digit growth in 2023. Turning to an update on growth and outlook, you'll be pleased to know that we had another outstanding quarter in new business wins and once again a very strong quarter for wins in the electrified space. I will highlight a couple of our more strategic wins in a moment. Electrified vehicles continue to provide great opportunities for us. We had a huge year last year in terms of business wins for battery, electric and hybrid electric vehicles. In fact, new business wins for electrified vehicles are well over three times what they were for all of 2021 and represent over $1 billion in annual sales. Momentum is clearly building in our portfolio of these important vehicles for the future. At this point, 51% of book sales in 2027 in our mobility business is for non-ICE powertrains, a huge shift from less than 25% in that category in 2021. With respect to mobility launches, we are seeing ramping volumes on launching programs which are predicted to reach 40%-50% of mature levels this year, generating incremental sales of CAD 700 million-CAD 800 million. Launching programs in 2022 generated incremental sales of over CAD 750 million. These programs will peak at more than CAD 4.1 billion in sales. We saw a big shift of nearly CAD 1.5 billion of programs moving from launch to production last quarter, partially offset by very strong business wins in the quarter. As usual, we're summarizing all of these expectations on our outlook slide now being displayed. With strong markets and market share growth, we are expecting to see double-digit growth on the top and bottom line in 2023. This drives from double-digit growth at both Skyjack and MacDon this year, coupled with solid launches in a growing market on the mobility side. Net margins will expand in 2023 on growing sales and better performance in both segments, notably the industrial segment where margins will expand back into their normal range. Mobility margins will be flat overall for the year, stronger in the back half than the first half of the year. We will also see strongly positive free cash flow this year, leaving us in an excellent position from which to drive future growth. Looking specifically at Q1, you should expect sales modestly up from Q4 2022, but meaningfully up from Q1 of last year. The mobility segment will see again sales modestly up from Q4, but well up from Q1 last year, with growth in North America and Europe from Q4 being partially offset by COVID-related declines in Asia. Normalized OE will be at best flat to Q4 2022 based on those lower Asian sales as well as higher material costs in Europe in addition to the higher energy costs that I mentioned earlier. The industrial segment will see sales seasonally up from Q4 of last year and significantly up from Q1 of last year. OE will be meaningfully up from Q4 2022 levels on stronger sales and cost controls as well as normal annual pricing resets. As a result, on the overall earnings side, you can expect modest to good normalized OE and EPS growth from Q4 2022 with flat to modestly improved margins. Notably significant EPS growth to Q1 of last year. Roger would like me to remind you that the situation is very dynamic and impacts are not fully determinable in terms of their impact at this time. Notable risk areas are supply chain, labor shortages, lockdowns in China, and geopolitical. Moving on to new business wins. On the mobility side, I will highlight a few of our more interesting wins this quarter. First, we were awarded a variety of gears for a hybrid vehicle, electric vehicle transmission program. These will be produced in India with an average annual volume of 600,000 units per year, launching next year. We were awarded a component to be used in industrial electrolyzers, which are used to produce hydrogen using renewable electricity and water. We'll produce 37,000 of these units per year at one of our German entities starting next year. We won a significant uplift in program extension for an e-axle program worth a significant amount of revenue, adding to our content on battery electric vehicles. This program will launch in 2026 in Hungary. Turning to an innovation update, I'm excited to share that our range of eLIN propulsion solutions is rounding out nicely. We recently announced our naming conventions for our off-the-shelf product family of e-axle solutions. In addition to the products that are de-designed to OEM-specific applications, this portfolio offers standardized propulsion systems that can easily integrate into existing architectures, all pre-developed by Linamar. This is of particular importance in the commercial vehicle fleet segment, where OEMs and outfitters want ready-to-go full system solutions that are fully validated and available now. The eLIN family of e-Axles offers designs for both independent and beam axle applications and covers vehicle classes one through through. This is another great example of how our eLIN team is well-positioned to capitalize on the opportunities in the transition to electrified vehicles. The Skyjack team continues to evolve their product with practical and useful customer-focused technologies. The Skyjack accessories catalog of custom features now adds perimeter lighting to the lineup. New LED lighting at the base of a DC scissor creates a no-go zone around an active machine. This improves safety on and around the machine. A visual lighting indicator is added to the existing audible alarm to let workers know that a machine is working nearby. We're proud to share that we have won not one, but two industry product innovation awards in the agricultural space. Both MacDon and Salford were 2023 AE50 award recipients, proving both of Linamar's agricultural business lines are industry leaders in their respective product categories. The AE50 is an annual award ceremony by the American Society of Agricultural and Biological Engineers. It's given for new products that represent the best innovation in engineering and technology for agriculture, food, and biological systems. Salford won for their HALO VRT, which stands for Variable Rate Tillage, and MacDon for their TM100 tractor mount header adapter. Both are great examples of delivering new product innovation to growers and to farmers. Finally, we continue to exceed on our global digitization journey with more and more connected machines, data connections, and robots being commissioned in our global plants every day. With that, I'm gonna turn it over to our CFO, Dale Schneider, to lead us through a more in-depth financial review. Over to you, Dale. Thank you, Linda. Good afternoon, everyone. As Linda noted, Q4 was a great quarter for sales and earnings growth despite the continuation of the supply chain issues impacting sales and other cost issues further impacting earnings net of any customer recoveries that we achieved. Q4 was another positive quarter for cash generation. As a result, we're able to maintain strong levels of liquidity at CAD 1.3 billion. For the quarter, sales increased 34.3% or CAD 2.1 billion. Earnings are normalized for any FX gains or losses related to the revaluation of the balance sheet and any potential other items that may have occurred in the quarter. In Q4, earnings were normalized for FX losses related to the revaluation of the balance sheet, which impacted EPS by CAD 0.22 per share. Earnings were further normalized for the net gain recognized in the quarter as we continue to finalize the purchase price accounting for the acquisition of our Mills River facility. Removing this net gain impacted EPS by CAD 0.10 per share. The total of these two issues impacted EPS by CAD 0.12 per share. As a result, normalized EPS for the quarter was CAD 1.61. Normalized operating earnings for the quarter were CAD 140.9 million. This compares to CAD 81.1 million in Q4 of 2021, an increase of CAD 59.8 million or 73.7%. Normalized net earnings increased CAD 40.5 million or 68.6% in the quarter to CAD 99.5 million. Fully diluted normalized EPS increased CAD 0.71 or 78.9% to CAD 1.61. Included in earnings for the quarter was a foreign exchange loss of CAD 17.4 million, which resulted from a CAD 17.1 million loss related to the revaluation in the operating balances and a CAD 300,000 loss related to the revaluation of financing balances. As I mentioned, the net FX loss impacted the quarter by CAD 0.22 per share. From a business segment perspective, the Q4 loss of CAD 17.1 million related to the revaluation of operating balances was a result of a CAD 200,000 gain in Industrial and a CAD 17.3 million loss in Mobility. Further looking at the segments, Industrial sales increased 73.1% or CAD 214.1 million to CAD 507.1 million in Q4. The sales increase for the quarter was primarily due to the higher agricultural sales, driven by both growth in the global markets and in our global market shares for our products. It also grew due to the acquisition of Salford, the higher access equipment sales, driven also by higher growth in our markets and market share gain in certain targeted markets and products. Higher sales prices were also achieved in the quarter to help release some of our supply chain cost issues. Lastly, we had a positive impact from the changes in FX rates since last year. Normalized Industrial operating earnings for Q4 increased CAD 59.7 million over last year to CAD 55.5 million. The primary drivers of the Industrial earnings were the increased contribution from the strong agricultural equipment volumes, the increased contribution from the higher access equipment volumes, the positive impact from the changes in FX rates since last year, and the increased margins from the acquisition of Salford. These were partially offset by the ongoing supply chain issues impacting labor and raw materials, and the fact that we had no government support related to COVID-19 in Q4 of 2022. Turning to Mobility, sales increased CAD 311.5 million or 25.1% over Q4 last year to CAD 1.6 billion. The sales increase in the fourth quarter was driven by the increasing volumes of launching programs, but also on certain other high demand programs. The sales impact of fully consolidating our Mills River location now that it's 100% owned, the cost recovers we received in the quarter from our customer negotiations, and the positive impact from changes in FX rates since last year. Q4 normalized operating earnings from Mobility were flat over last year at CAD 85.4 million. In the quarter, the Mobility earnings were impacted by the increased contribution on launching programs and certain mature programs, the positive impact from the changes in FX rates since last year. These were partially offset by the impact of fully consolidating Mills River and the increased raw and utility costs, net of any customer re-recoveries in the quarter. Also due to increased travel costs that are supporting our growth. Returning to the overall Linamar results, the company's gross margin was CAD 248.8 million, an increase of CAD 87.9 million compared to last year, due to the same factors that drove the segments that I just discussed. Cost of goods sold amortization expense for the fourth quarter did increase slightly to CAD 112.7 million compared to Q4 2021. COGS amortization as a percent of sales decreased to 5.5%. Selling, general, and administration costs increased in the quarter to CAD 110.1 million from CAD 96.1 million last year. This is primarily the result of the incremental SG&A costs from both the Salford and Mills River acquisitions and the increased travel costs that are supporting our growth. Finance expenses increased by CAD 10.9 million since last year, primarily due to the additional interest expense as a result of Bank of Canada and the US Fed rates increasing. We also had increased debt levels due to the acquisitions and the activity on the share buyback program that was completed that last year. Finally, we had a negative impact on changes of FX rates on debt since the last year. The consolidated effective interest rate for Q4 2022 was 3.2%. The effective tax rate for the fourth quarter was 23.3% compared to last year. This increase is mainly due to an increase in non-deductible expenses compared to last year, an unfavorable mix of foreign tax rates. These are partially offset by the decrease in tax expense now that Mills River is fully owned. We are expecting the 2023 full year effective tax rate to also in the range of 24%-26%, but higher than the 2022 full year tax rate. Linamar's cash position was CAD 860.5 million on December 31st, a decrease of CAD 67.9 million compared to December 2021. The fourth quarter did generate CAD 221 million in cash from operating activities, which was used mainly to fund CapEx and our share buyback program. As a result, net debt to EBITDA did increase to 0.42 times in the quarter from a year ago, mainly due to the acquisitions completed in Q2 and the activity on the share buyback program. Based on our current estimates, we are expecting 2023 to remain strong and leverage is expected to remain low. The amount of available credit on our credit facilities was CAD 462 and a half million at the end of the quarter. Our available liquidity at the end of Q4 also remained strong at CAD 1.3 billion. As a result, we do believe we have sufficient liquidity to satisfy our obligations in 2023. To recap, sales and earnings for the quarter was a story of improving markets, increasing market shares in both segments. The supply shortages that have hampered OEM production requirements have also continued to see improvements, adding to additional mobility, sales and earnings. The supply chain related cost issues continue to impact both segments' earnings. The good news is that the cost increases have been tempered with sales price increases and cost recoveries achieved in both segments. Despite these challenges, in the quarter, we still remain very strong liquidity levels at $1.3 billion. That concludes my commentary. I'd now like to open up the call for questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star followed by the number one on your touchtone phone. You will hear a one-tone prompt acknowledging your request. If you would like to cancel your request, please press star two. Please ensure you lift the handset if you are using a speakerphone before pressing any keys. Your first question comes from the line of Michael Glen from Raymond James. Your line is now open. Good evening. Just a couple questions. Based on the guidance, it looks like CapEx next year is going to be somewhere in the CAD 650 million-CAD 700 million range. Can you just break that down a little more? Like where do you need to spend the capital exactly? Like, what are some of the big buckets of spending? Yeah. You're right. CapEx is gonna be up quite a bit, this year. Really the issue is we've really been skinny on CapEx the last couple of years, well under the level of spending that would normally result in double-digit growth. What's happening is we've got a lot of catch up happening this year. We're still driving that double-digit top line growth, but we didn't have the, capital spending to really make it happen. We've got a big launch of business, a big book of business rather that we're launching, and we need to spend the capital. The level of spending is gonna be in line with our normal level of spending. We like to see sort of 6% - 8% to drive that double-digit growth. This is a normal level to drive that kind of growth. But it is up from prior years. How it breaks down is into a whole variety of different programs. Not really a level of disclosure we would normally get to kind of break that down for you. But I can say that, you know, it's really, it's catch up because we've had a couple of really tight years on the CapEx side. Yeah. I think as well, just to add maybe some perspective, and it's across the board too, right? Like it's we've got a lot of great launching in regards to very electrified wins that are very agnostic to you know, the powertrain side. In fact, in the industrial side, regional growth as well, to increase capacities, you know, like we've talked about backlogs and things like that to really increase capacities in the industrial side too. All positive, and as Linda said, some catch up, but a lot of great things matching our electrified wins. Okay. Working capital, if I look back historically, typically there had been a recovery that would take place in Q4 on working capital. It didn't happen this year. Is there some timing there? Should we expect something different in Q1 for working capital? Just trying to get some clarity there. I would say the biggest impact to working capital for prior years is the economic hardships that we've negotiated. We have negotiated some good recoveries, some of those are still in receivables for this year. Obviously as we negotiate recoveries through 2023, that will also impact non-cash working capital depending on timing of payments. This wins the $4 billion backlog, it's nice to see that skewing to electric. Like one of the, one of the issues we've seen though is that some of these electrified programs have started to have margin profiles that are perhaps somewhat underwhelming at the beginning. Like, can you just give us some degree of expectation, like how we should think about the margin profile for these electrified business wins and how they'll impact Linamar's margin profile as you ramp those? I mean, when we're quoting business for electrified vehicles, we use the same return targets as we do for more traditional internal combustion business. The margins are always something that ramp up. When you're starting out, obviously, any program, it doesn't matter whether it's electrified or not, you're gonna start out, you know, in a loss and then make your way up to profitability and targeted margin levels. We, you know, we'll see the same kind of curve happen with the electrified business. It's obviously going to be reliant on volumes. If volumes are, you know, slower to ramp then, you know, margins are gonna be slower to ramp as well. We have faced the exact same scenarios with internal combustion business launches if volumes were lower. I don't really see a big difference other than is there potentially more volume ramp risk with electrified because we're relying on market adoption of new technology? That's that certainly would potentially be the case. I will remind you as well that when we're tooling up new programs, we try to always use flexible CNC equipment. We have it's kind of modular in nature in the sense that we don't have to put up necessarily 100% of the capital in place upfront. We can add some elements of the capital in over time. Obviously, it depends on the process and, you know, how many machines you have at every operation. That does help us to manage the volume risk, and is how we have traditionally managed volume risk and ramp with our internal combustion engine business. We would do the same on the electrified side. There's a lot of capital as well that is sort of, you could do it on both, right? An internal combustion engine as well as a electrified, so a gear is a gear. As long as we have the ability to pivot, fast, you know, during a launch, if a launch isn't, ramping up and we could take those pieces of equipment and redeploy them, it's very useful for us. Okay. Thank you for taking the questions. Pleasure. Your next question comes from the line of Peter Sklar from BMO Capital Markets. Your line is now open. I wanted to ask you about the operating margin performance in the mobility segment in the fourth quarter. It was the lowest margin quarter for the full year 2022. For example, in your mobility segment, the operating margin was 6.4%, and in Q4 it came in at 5.5%, down almost 100 basis points. I'm just wondering, like, what happened in the fourth quarter that you got the depressed margin? Like, I understand there's the die casting facility, the Mills River facility that's losing money, that you're fully consolidating that now. Is that enough to drive down the margin by that much relative to Q3? Maybe you can elaborate a little bit on what's going on with the margin in the quarter. Yeah, sure. I mean, it's not unusual for Q4 to be softer than Q3. It depends on what happens with Christmas shutdowns compared to summer shutdowns. In fact, what we saw in the fourth quarter were production sales actually down a fair bit compared to the third quarter. You're not seeing that in the overall sales because sales were bumped up. The top line was bumped up by two things. One was the customer price release that is offsetting the cost increases, right? You know, you get this bump on the top line, it's offsetting some big cost increases, but it's not sort of contributing its own margin as you might expect if it was a production program. Secondly, the top line was bumped up by a favorable exchange rate, which, thanks to our natural and formal hedging program, also doesn't have much impact on the bottom line. That also has a negative impact on margin. Really a couple things going on there in the fourth quarter. FX, diluting margins and then the customer price relief diluting margins. Okay. On the, like the customer relief and these net input costs, how is this gonna play out? Are you anticipate that you're gonna recover all of these costs through, you know, through relief and these commercial discussions, or is there gonna be like a certain amount of this net input cost that you just can't get back from your customer and you're just gonna have to absorb that in your business structure and wait till these programs roll off and then incorporate the new cost levels into, like, your, I guess your pricing process for new contracts? How is all this going to play out in your opinion? Yeah, I mean, it really depends customer to customer and program to program. Also what the nature of the cost. If the cost that's going, that has gone up is something that's transitory in nature. You know, for instance, you know, higher freight costs or higher energy costs that then are normalizing, that's not a permanent increase to your cost structure. I wouldn't say that, you know, that this is a permanent negative impact to margins 'cause many of these cost issues will, with time recover. You know, will we get all the cost increase back? Like, probably not. I mean, it's a negotiation with customers, and we're able to achieve some level of cost relief. The team's done a fantastic job of that. You know, it's not necessarily gonna be 100%. Yeah. To give a maybe a little bit more specifics around it, Peter, I mean, the key is if you can get things on indices that scale up and down based off where we are, that's always the best thing to do, just because you're protected 100%. That's difficult with some of the customers. You do try and push for indices, but you can't put everything on an indice. As Linda said, we're going after every dollar, every cent of cost, we go after, and we basically sit down with each customer, negotiate, you know, and we say, "Here's the cost, and we wanna get 100% relief." In every case, we're not getting 100%. I mean, some we have, but I would say most not. You are negotiating to get new business, offsetting businesses and things like that. Also, I would say when we're negotiating, if we have the ability, you know, with an engineering change or, you know, an uplift or something else, we will negotiate as well because if you're, you know, sucking up costs and you have something, you know, new to come, you wanna recover that cost, as you pointed out. It's pretty fluid. You know, costs, as Linda said, are stabilizing, but there's other areas that are going up, each one of them, we take in to all the customers. I will also add that new programs, of course, are being quoted at current cost levels. you know, if this is not impacting future business that hasn't been won yet, that's obviously gonna be quoted at a level that is reflective of the current level of cost. Okay. Okay, that was good backdrop on that. Just lastly, I wanted to ask you, the CAD 1 billion of electrified business awards that you've received. Can you give us a rough, like, a rough split? Like, how much is that related to hybrid vehicles, and how much would be related to pure battery electric vehicles? Yeah. It's, it is a blend of both. We are heavier on the battery electric side generally. If I look over time at all the wins that we've had, I'd say it's more battery electric than hybrid. In any one year you might see more hybrid than electric. It kinda depends on what's happening in the market at that time. Okay. That's all I have. Thank you. Your next question comes from the line of Krista Friesen from CIBC. Your line is now open. Hi. Thanks for taking the question. I just wondered if you could talk a little bit more about when we look at your Q3 guidance for mobility, the margins you're guiding for expansion in the margins in 2023, and now you're guiding for those margins to be flat. What's changed for you what, since November when you reported Q3 versus now to call for flat margins? I mean, I would say continued escalation in costs on specifically the energy and material side is certainly a factor. Also a little softer first quarter in Asia, just given the impact of COVID disruptions after their opening. Their Q1's a little softer than we'd expected it would be. That's impacting Q1 margins, which obviously impacts the overall. Okay, great. Obviously your balance sheet is in a great position right now. Can you speak to the M&A pipeline and if you're seeing any opportunities out there right now? Yeah, I mean, I think, there's always a lot of opportunities out there. Of course, we're interested in looking at opportunities like for instance, on the mobility side, anything that's gonna continue to drive our electrification strategy, our strategy to reduce our reliance on ICE powertrain, which we've done a fantastic job of actually, just in terms of new business wins. As noted, you know, more than half of our business not reliant now on those on those products. Anything we can do to add to that is gonna be of priority interest. There's always interesting things on the industrial side as well. Yeah, I mean, that's something we're always looking for, products or businesses that might be the right fit from a product technology and geography perspective. Perfect. Thanks so much. I'll jump back in the queue. Your next question comes from the line of Brian Morrison from TD Securities. Your line is now open. Thanks very much. Good evening, everybody. Thanks for all the color on the mobility margin. I wanna come at it a little bit of a different way, but you provided a lot of color, which is great. If I do my math right, I think you should get maybe 100 basis points of margin improvement from volumes and incremental margins or increments from volume. Excuse me. I guess when I take a look at energy and materials, is that sort of what's baked into your guidance for 2023, that we should have somewhere in the neighborhood of 100 basis points of margin degradation from that when you say that's been the key change? Yeah. I mean, I can't be that specific for you on exactly the exact dollar level or percentage level that it is impacting. Energy and material costs, I can tell you are up. Again, I'll point out the softness in the first quarter for Asia, which is impacting on the margin side. I'll remind you as well that the mobility segment is gonna grow in double digits on the top line. With flat margins, that obviously suggests we're gonna be growing in double digits or close to it on the bottom line as well. We are expecting some pretty significant earnings growth in the mobility segment this year, even as margins remain flat. understood, and that's a good performance. If I look at in terms of the margin, so the key factors are obviously energy inflation, it's launch costs that are gonna be significantly higher than last year, and then the COVID impact that you just noted, correct? Yeah. Energy and material cost increases. When I take a look at the industrial segment, I'm hoping you might be able to give me in terms of annual price resets, what's the magnitude, I guess, just on a consolidated basis of the increase in pricing? I realize it's what the market will accept, but when you have performed this, is that aimed at targeting margins that are in the middle of the target range, or should we be thinking somewhat towards the lower end as improvement? I mean, I think it's fantastic that we're getting margin improvement back into a 14%-18% margin range when we've been, you know, down in the, you know, 10%-12% range. I, you know, I can't be any more specific for you of where in the range, but I think the fact that we're gonna be back in that 14%-18% is fantastic. Okay. More importantly, though, I just wondered what you might be able to share in terms of the pricing resets that happened at the beginning of the year. Well, they happened at the beginning of the year, I guess, is what we can tell you. We really wouldn't wanna say what we do with each customer. Yeah, we sit down with each customer, Brian, and work out a deal, and we factor in the cost that we've seen over the last year and specifically put out that to the customer base. Yeah. Okay. No, the performance to guidance looks in line with consensus, so it's all very good. One last question I wanna ask, though, is in terms of your balance sheet, which is in great shape in the free cash flow, how are you approaching the NCIB as we get into 2023? Yeah. The NCIB expired, and we purchased about 4 million shares under it, so I think it was a very successful program. We have not as yet renewed the NCIB. If the share price softens, then obviously that is something that we can do quite quickly. In the meantime, I'll just remind you, we did increase our dividend by 10% this quarter. We're continuing to return cash to shareholders in a slightly different way. Okay. No, it's well done to capitalize on the market weakness. Thanks very much. Okay. There are no further questions at this time. I will turn the call over... we do have another question from Michael Glen from Raymond James. Your line is now open. Hey. Just to follow up on the mobility margins, what's the level of losses from the Mills River that you're expecting in 2023 versus 2022? How do you see that improving? I mean, it's gonna be well improved. I mean, we already saw improvement in the fourth quarter, compared to the third and earlier in the year. We have a plan in place. We're executing on it. It's going well. We will see, definitely lower losses this year than last year at Mills River. I'd point out, as Linda mentioned in her commentary, we're expecting it to get to break even 12 to 18 months, so that alone tells you, there's a significant improvement. Okay. Thank you. Okay, great. There are no further questions at this time. Okay, good. To conclude this evening, I would like, as usual, to leave you with three key messages. First, we are thrilled to deliver exceptionally strong double-digit top and bottom line growth in the fourth quarter. Second, we continue to execute very successfully on our strategy to grow our electrified vehicle content and transform our mobility business with over CAD 1 billion in new business wins secured, more than triple any other year in our history, and more than half of our booked sales in 2027 already not internal combustion engine powertrain. Finally, we're really proud of the multiple records logged in 2022. Record sales, record new business wins, record market share in our mobility business, as well as targeted products in the industrial business, and of course, our 10th consecutive year of free cash flow, which is excellent. Thanks very much and have a great evening. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.