Good evening, ladies and gentlemen. Welcome to the Martinrea International third quarter results conference call. Instructions for submitting questions will be provided to you later on. I would now like to turn the call over to Mr. Rob Wildeboer. Please go ahead, sir. Good evening, everyone. Thank you for joining us today. We always look forward to talking with our shareholders, and we hope to inform you well and answer questions. We also note that we have many other stakeholders, including many employees on the call, and our remarks are addressed to them as well as we disseminate our results and commentary through our network. With me are Pat D'Eramo, Martinrea's CEO and President, and our CFO, Fred Di Tosto. Today, we will be discussing Martinrea's results for the quarter ended September 30, 2022. I refer you to our usual disclaimer in our press release and filed documents. I will speak, Pat will speak, then Fred, and then we will do some Q&A. I wanna touch on three things for you and then turn it over to Pat and Fred for their comments, many of them more detailed than mine and perhaps more interesting. First, I wanna thank our people and our leadership team for their hard work. Despite tough times, our results are the fruits of their hard work and dedication, and a lot of great performance. We say often, it's all about your people, and ain't that the truth. Our leadership group recently got together for a global leadership conference, twice postponed by the pandemic and lockdown measures. 150 or so people. It was a fantastic event. Pat will get into more detail about a few things, but the culture we drive at Martinrea every day in everything we do is evident in our team. A focus on lean thinking, taking waste out of every process. A focus also on entrepreneurial thinking, which means taking ownership of what you do. At the core, a golden rule culture, meaning treat people the way you wanna be treated. I talk about these things a lot, but so do all the other leaders in our team. We walk the talk and take care of our people. The theme of the conference was Living Our Vision, and that's what we do consistently, making people's lives better by being the best we can. Second, related to our culture are our results. I believe, as Peter Drucker has said, "Culture eats strategy for breakfast." Here is an example of good culture breeding good results. As Pat and Fred will elaborate on in some detail, our Q3 was outstanding, especially in the context of the challenging world in which we live. Record quarterly revenues, record quarterly adjusted EBITDA, excellent free cash flow, and one of our highest DPS numbers ever. These results should not come as too much of a surprise to you or to us as they reflect what we have been saying for quite some time. If you recall, very early last year, we said the chip and other supply chain shortages were a real problem. Some said chip shortages were a blip. We said they were a blimp, if you recall. Check the tape. We said that we would struggle as customers' production schedules were massively disrupted, and a year ago, we lost money in Q3 and Q4, as predicted. At the time, we said the first half of 2022 would be better, and it was. We showed decent profitability. We also said that the second half of the year would be better than the first half, and this is proving out. By the way, we have also said and still say next year will be better than this one, as we expect production volumes to improve significantly. We also expect higher revenues, free cash flow, and operating margin. The trend line is up to the right, as they say, and it's proving out. Please recall our position in 2019. That was a record year of profitability and profits. We also won over $1 billion in annual sales based on projected volumes of new work, if, as, and when launched. Even with the pandemic, lockdowns, trade disputes, inventory shortages, a Russian war effort, inflation, and higher interest rates, we have continued to invest in our business in launching that record level of new work. And so now, that much is launched or is launching, our revenues are now significantly higher, driving higher profits and cash flow. Not unexpected. This is what we planned for. Frankly, and this is not an arrogant statement, but it is a true one, we believe we understand the auto parts market, the auto market, and most of the geopolitical issues we face as well as anyone in the business or looking into the business. We have now over 18,000 employees in 57 plants in 10 countries on five continents, and it is our business to know our business. As we say at the start of our calls, we want you to see how we see the world, and we've been pretty accurate on the fundamentals. We are happy to share our thoughts. Long-term, which should be the time horizon for the investor, our future looks bright, and we have never been stronger. The third area I would like to touch on are some of the key challenges we see over the next several months, noting that the overall trend line for auto parts suppliers in general, and us also, is positive over time, not negative. The Russia and Ukraine situation is not going away anytime soon and still impacts energy prices, supply chains, including many minerals and so forth. This will be a headwind, we believe. Related to that is the issue of energy prices in Europe, where we do about 20% of our business. We think it's gonna be a cold, expensive winter, and frankly, we see a strain on energy prices over the winter and probably next also. This will have an effect on profits and margins and probably volumes. But, as predicted, we are seeing moves to provide energy price relief to industry. Our industry has been involved in many discussions. In Germany, the auto industry is the largest, and the country is going to ensure the industry does not shut down. Programs are being developed to alleviate energy costs. This after Europe has worked hard to build up gas reserves for the winter. Germany is talking about a subsidy program that is massive and could cost them EUR 200 billion. This should keep production going. A very, very expensive lesson, perhaps, in sustainability and renewable energy policy. It could cost Germany half a trillion dollars to remove reliance on Russian gas. Ouch. Inflation pressures do exist, and it's front-page news, especially as they give rise to higher interest rates as the Fed, the Bank of Canada, and others raise rates to lower inflation. I'm not a fan of the higher interest rate policy, as I think it's somewhat misguided. In industry, including our own, we are seeing much inflationary pressure easing off, including in many input products, materials, and shipping costs. Inflation has been caused, to a large extent, not by the war in the Ukraine, but by governments printing money, by supply chain issues caused by lockdown policies, and so forth. We are getting a handle on some of these things. At the same time, consumers are going to spend on travel, leisure, entertainment. People have been locked up for two years. They are going to spend. Not sure higher rates are necessary, and many in our industry have given that advice to governments. Maybe our industry input had some influence on the lower than expected rate hike last week. The time to stop interest rate hikes in North America was yesterday, especially in Canada. I digress. But suffice it to say, I do believe rate increases will end sooner rather than later, and rates will stabilize at least at a sustainable level. I also believe people will adjust and continue to buy vehicles as they are financed by rates that still historically are not too high, often provided by OEMs that have strong balance sheets. As I said, industry production next year and a number of years after that should be higher than this year or last, and that is good for us auto part suppliers. We would like to thank all our shareholders, lenders, suppliers, customers, governments, and employees for your support. We cannot grow and thrive without it. With that, I'd like to turn it over to Pat. Thanks, Rob. Hello, everyone. As noted in our press release, we generated an adjusted earnings per share of $ 0.56 and an adjusted operating income of $70 million in Q3, up from a loss of $16 million in Q3 of last year. Production sales came in at $ 1.1 billion, up 41% year-over-year. Adjusted EBITDA of $ 140 million was a record for the company, as Rob mentioned. Adjusted operating income margin came in at 5.8%, 170 basis points sequential improvement over Q2 on production sales that were 7% higher. A solid result, which was mainly driven by higher sales volume and an improved mix compared to last quarter, a reduction in launch cost as volumes on some key programs are smoothing, although others are still sporadic, and continued improvements in our Martinrea Operating System or Lean activity. We also continue to make good progress on recovering inflationary costs through commercial negotiations with our customers. I'm proud of the work the team has done on this front. These discussions have a lot of layers and are never simple, but our team has faced the challenge head-on and concluded several agreements on favorable terms. We have made good progress commercially, and we expect to see further progress as the year comes to a close. Commercial negotiations will not completely subside, but we do see them normalizing later, in the latter part of 2023, depending on inflation. On our last call, we said that we expected our Q3 results to be better than Q2 as supply chain bottlenecks improved, our launch activity smooths, and we drive cost recoveries. This is exactly what happened. We are right where we expected to be during the quarter, and we expect a strong finish to the year with good momentum into 2023. Having said that, we continue to face a challenging environment on several fronts. We have seen steady improvement in the production environment since last year. We continue to deal with supply-related disruptions from several of our customers. While the production environment is stabilizing, it's not as stable as we expected it to be at this point. Margin percentages remain below potential despite the improvement in the past few quarters. We made progress in offsetting significant costs, but inflationary pressures are proving to be more persistent than we envisioned. While inputs such as steel and aluminum have seen some pricing relief, we have passed through mechanisms on these commodities. For other commodities where we don't have pricing pass-through, we have not seen as much relief. As you know, energy prices have been a significant headwind in our European business. Though natural gas prices in Europe have been declining since September, they remain a headwind and continue to sit well above year-ago levels. The good news is we continue to expect a strong 2023, which I will elaborate on in a moment. Turning to our global operations. In North America, we saw a notable increase on our adjusted operating income margin in Q3 compared to Q2 on an 8% increase in production sales. As mentioned earlier, lower launch costs and a positive mix, along with improvements in operations, resulted in better margins during the quarter. As you are aware, we have been launching a lot of business over the last couple of years. On our last call, we indicated that we had not seen much benefit from lower launch costs and that this would become more evident in the back half of the year. This proved to be the case in Q3 as programs ramped up and we made operational progress and launch costs declined. As discussed, we are making progress on recovering inflationary costs with more to come. Along with inflationary recovery, we are also making steady progress operationally, and we continue to see opportunity here. There is a lot we can do in the moment and even more that we could achieve in a more stable labor environment. Labor remains challenging all over, but especially in the United States. Turning to Europe, adjusted operating income declined slightly in the third quarter compared to Q2. We continue to make progress in our operations. Unfortunately, this has been masked by a significant cost challenge, most notably energy, and we are devoting a lot of time on recovering a fair portion of these costs. In our Rest of World segment, adjusted operating income improved over last quarter on better volume and mix as the strict COVID lockdown measures in China that impacted us through the first half of the year began to ease. Looking forward, we continue to expect 2023 to be a strong year for us with better production volumes, sales, margins, and free cash flow compared to 2022, and what we expect will be the beginning of a strong cycle with the majority of our plants running at full capacity. With that said, we are revising our 2023 outlook. Based on what is in front of us at the moment, we now expect 2023 total sales to be between $4.8-$5 billion. Adjusted operating income margin to be between 6%-7%, and free cash flow to be between $150-$200 million. Although short of what we originally were expecting, it's still a very solid year, in particular, the free cash flow outlook. The updated margin and free cash flow outlook reflects the slower normalization in the supply chain and production environment, tight labor conditions, and the fact that we are not recovering 100% of inflationary cost increases, although I would say that we are doing quite well in this area. The free cash flow outlook is also being impacted by higher interest costs due to overall increased borrowing rates. Operating margins are also being impacted by material pass-through, which is largely the reason for our sales outlook range being up, along with the expected higher tooling sales. Excluding these two items, our sales outlook for next year would actually be lower than our original outlook, generally reflective of the current IHS volume projections. Material pass-through impacts our sales with no corresponding incremental margin benefit. This has a decremental impact on our margin percentages as it essentially represents sales without profits. Tooling sales are also essentially passed through to our customers and carry little to no margin. Overall, we're expecting 2023 to be a solid year and a nice increase from 2022 levels, and we are very focused on free cash flow, and it is reflected in our outlook for next year. Of course, there is still a lot of uncertainty, as Rob mentioned, be it from supply chains challenges that impact production or macroeconomic risks from high inflation and interest rates or the potential for an economic slowdown. The energy crisis in Europe in particular is a material risk, one that we are monitoring closely. We don't have a crystal ball, but we are confident that we will navigate our way through these challenges as we have in the past. Now I'm gonna take a moment and talk about our Global Leadership Conference, or GLC, that we held last month in Blue Mountain, a couple hours north of Toronto. The GLC brought together 150 of our top leaders across the organization for three days to discuss the company's strategic direction and priorities for the future. It was a great event. We had people in attendance from every region that we have a presence in, including Canada, the U.S., Mexico, Brazil, Germany, Spain, Slovakia, China, and Japan. Leaders left the conference energized and excited about our future with a clear direction on priorities for 2023 and 2024. There are some key takeaways from the conference. The overarching theme is that we are doubling down on our four-pillar strategy, which encompasses our high-performance culture, operational excellence, disciplined financial management, and customer focus. This is the same basic strategy that enabled us to expand our business both organically and through acquisition, double our adjusted operating income margin from 4%-8% in less than five years, and introduce new and innovative products to the market, or what we call breakthrough products, securing the next leg of our growth. Simply put, the strategy has served us well in the past, so we are accelerating it. I want to expand on what disciplined financial management means. To us, it means prudent, profitable growth, and a focus on free cash flow. Sales growth is to be selective, targeted, and guided by our return on invested capital and free cash flow targets. We had several presenters speak on the importance of free cash flow, and we held an interactive workshop on the topic that all attendees participated in. We are committed to these objectives and have a high level of buy-in across the organization. I also wanna touch on operational excellence. We spent a lot of time talking about program management and our Martinrea Operating System, or MOS, what we sometimes refer to as Lean. Through presentations and panel discussions, business unit leaders and other executives reflected on our challenges and key learnings for the future. Of course, strong program management is also a key part of the customer focus, and it has a big impact on how we are perceived by our customers, how they view our capabilities, on-time delivery, quality, and the ability to adjust to demands that have had tremendous fluctuation due to supply chain challenges. For MOS, we held multiple workshops using interactive tools that demonstrated how implementing lean practices and having a lean mindset have positively impacted the business, and how we must accelerate this thinking to continue to improve efficiency, productivity and profits as well as employee engagement and morale. Another key takeaway is that we've had a lot of opportunities within our core automotive parts business, but not limited to it. We are an innovative company, and our R&D capability is strong. We see a lot of opportunity to develop new, innovative products for our customers. These include breakthrough products, some of which I outlined in detail on our last call. We expect to introduce more of these products to the market in the coming months and years ahead. Our Martinrea Innovation Development, or MIND Initiative, is also central to our innovation focus. MIND has already delivered tremendous value to us. We have a 21% ownership stake in NanoXplore, and together, we introduced the brake line product coated with graphene that is unique to the market and has recently been named a 2022 Automotive News PACE Award winner. We continue to explore the potential to supply graphene enhanced lithium-ion batteries for electric vehicles through our VoltaXplore joint venture. We see MIND as an incubator for new technologies that can augment our product offering and capabilities, and there are a number of exciting opportunities that we continue to explore through this initiative. We covered a lot of ground in three days, and as I alluded to, people left with a clear vision of where we are heading, as an organization and what leadership's role is to deliver on the plan. Many thanks to the Martinrea team for their hard work that has provided strong results thus far. With that, I'll pass it to Fred. Thanks, Pat, and good evening, everyone. As Pat noted, our third quarter financial results are much improved over last quarter on better margins and higher production sales with a record quarterly adjusted EBITDA. We continue to deal with challenges on multiple fronts, including supply-related production disruptions, inflationary cost headwinds, tight labor market conditions, and an energy crisis in Europe. Our results continue to trend higher, as I said they would. We're making great progress in recovering inflationary costs through favorable commercial settlements with our customers, and we continue to drive operating improvements across the organization. We have also started to see the benefits of lower launch costs in our margins. We expect our results to improve further as supply chain disruptions abate and our launch activity continues to normalize. As Pat outlined, we anticipate higher production volumes, sales, margins and free cash flow in 2023. Taking a closer look at our performance quarter- over- quarter. Production sales were 7% higher on better volume and mix. The production environment continues to improve, though we're still dealing with supply-related production disruptions with a number of our customers. Adjusted operating income margin came in at 5.8%, a nice increase from the 4.1% we generated last quarter. Margins benefited from improved volume and mix, lower launch costs as key programs ramp up towards mature volumes, and operating improvements from our Lean activity. As such, adjusted operating income was up 53% sequentially in Q3, and adjusted EBITDA was a record $ 140.2 million, up 23% over Q2. Free cash flow came in at $ 64.1 million, a solid result reflecting strong EBITDA growth and positive working capital flows. Free cash flow was $ 35.4 million for the first nine months of the year. We expect free cash will be positive for the full year 2022. Looking at our performance on a year-over-year basis, third quarter adjusted operating income was $ 69.7 million. It was up sharply from a loss of $ 16.2 million in Q3 of last year. Adjusted EBITDA more than tripled on production sales that were 41% higher. Recall that Q3 2021 was a quarter that supply-related production disruptions were at their worst, marking a low point in our financial performance before results began to improve in subsequent quarters. While higher year-over-year operating results are nice to see, margins are still below what we know we can achieve. It takes time, but ultimately, we do expect to get there. Moving on to our balance sheet, net debt was about flat quarter-over-quarter at $ 928 million at the end of Q3. As we announced earlier this year, we have an amended covenant structure with our lenders, where adjusted EBITDA in Q3 and Q4 of last year is ignored. The remaining quarters in the trailing 12-month period are prorated when calculating net debt to EBITDA for covenant purposes. Our leverage ratio is also subject to higher limits through the third quarter of this year. On this basis, our calculated net debt to EBITDA under the revised terms was 2.17x in Q3, down from 2.3 x in Q2, a comfortable level and well below the covenant maximum of 3.75 x for the quarter. Based on the standard or unadjusted calculation, net debt to EBITDA was 2.43 x at the end of the quarter, well below our typical 3 x covenant threshold. As such, we are below 3 x even without the amended formula. We expect end year lower than this as we lap Q4 of 2021. Our leverage ratio should naturally continue to improve in the coming quarters as we generate an increasing amount of EBITDA and free cash flow, a portion of which we will use to pay down debt. We have strong relationships with our lenders, and we thank them for their continued support. With that, I'll turn it back over to Rob. Thanks, guys. Now it's time for questions. We see we have shareholders, analysts, and competitors on the phone, also some employees, so we may have to be a little careful with our answers, but we'll answer what we can. Thank you all for calling. Thank you. We will now take questions from the telephone line. If you have a question and you're using a speakerphone, please lift your handset. If you have a question, please press star one on your device's keypad. You may cancel your question at any time by pressing star two. Please press star one at this time if you have a question. There will be a brief pause while participants register, and we thank you for your patience. First question is from David Ocampo from Cormark Securities. Please go ahead. Thank you. Good evening, everyone. Hello. Pat, I really appreciate the margin commentary on 2023, and it does make a lot of sense. When I'm thinking about the inflation pass-through provisions and the revenue basically has zero margins, do you believe that the 6%-7% is the new normal going forward, or is that 8% still possible in the current inflationary environment? Like thinking beyond 2023. You know, until we know what inflation does, it'd be hard to answer. I mean, if things normalized or, you know, go back to what you'd call a normal level at least, certainly, you know, we could get back on board with where we were in the past. The energy costs in Europe and the erratic supply chain situation, those things would have to get back to what we would consider normal before I would commit to that. Yeah, I think the pass-throughs are going to be downward pressure on margins. The higher the pass-throughs are, the greater the downward pressure, and that has a lot to do with our updated forecast. I would say this, if all things being equal, you know, if you go back to 2019 when we were in the 8% range, certainly those things are in our grasp in the future, I believe. Pat, is it better to look at or evaluate Martinrea based on kind of return on invested capital as opposed to margins just 'cause of the way that the revenue portion of the inflationary pressures is zero margin? Yeah. I think at the moment, certainly our returns, our free cash flow generation, and just our improved profit would be, you know, probably a better thing to look at. Though I think margins again, in the future would be something to discuss. At least to our evaluation, we'd support that. Is there a, like a return on invested capital target that we should be thinking for you guys? Yeah. We have strict hurdle rates. We have disclosed that in the past. We typically target an IRR of 15%. Just given the higher interest rates, we've actually increased that slightly, so it's somewhat higher than that at the moment. It kinda fits in with our strategy of being somewhat more selective in terms of what bids we go after going forward. With our plants for the most part being full, it gives us the ability to step back and make better decisions than you might if you had a bunch of empty facilities. Yep, that makes sense, guys. That's it for me. Thank you. Thank you. Our next question is from Mark Neville from Scotiabank. Please go ahead. Hey, good afternoon, guys. Great results. Thanks. Maybe just first on the recoveries. Can you just give us sort of a rough sense of how big the impact was in Q3, and maybe just how it flowed through the P&L? I assume it's just comes through in the sales at a 100% margin. Is that fair? I'm not gonna get too specific in that area. In the past we talked about the $100+ million headwind. We're recovering a fair share of that. We're not recovering 100%. With the higher energy costs more recently, that number is a little bit higher. I wanna kinda stay away from that just given the fact that some of these negotiations and the results are somewhat confidential and don't wanna necessarily discuss and elaborate any further. Yeah, that's fine. For sure. I would add, though, that we're happy with our progress. Okay. Yeah. I guess I had sort of a follow-up and was just curious of how far along the way are you. I think I'm not sure if it was sort of Pat or Rob that said this might continue these negotiations into the second half of 2023. Is that right? Yeah. It was me. Basically, you're doing commercial negotiations all the time. It's just the. There's a significant increase due to the inflationary costs this past year. Those will spill over into next year, at least the early part of the year. Then as you know that normalizes, what I would call normal commercial negotiations will continue as they always have. The level of intensity and the amount of time spent on it is much higher this past year. Maybe I'll just add, so as we close out 2022, you know, we're closing out some of these final negotiations with some customers, and a lot of them, all of them are dealing with 2022. Some of those deals will set precedent for next year and carry into next year, and others will have to renegotiate essentially. This activity will continue for a period of time, until we get to a new normal and cost level. A lot of the higher financial results have been driven, obviously, by the record revenues, and some of that's pass-through, but some of that is just the fact that we're producing a lot more product. As you recall, we won a lot of work in 2019. Over the last several years, we've continued to invest lots of capital in order to launch those programs and put capital in place to support the higher revenue level, and with that comes higher EBITDA and all that type of stuff. Yeah, I know for sure these are good numbers for Q3 this year. Maybe on the 2023 guide, again, maybe if we're talking EBIT dollars versus EBIT percent, I think if my math is correct, the EBIT dollar midpoint will be down sort of 10%-15%. Again, I appreciate all the details and the puts and takes, but I guess if you were to, you know, rank the top two, three things that are impacting, what, you know, how would you rank those, I guess? Hey, you gotta do your job too. As far as the improvements, I guess is what you're asking? What are the tops- The reduction. Oh, okay. For the reduction, yeah. I mean, I think we hit all the main points. I mean, I'll maybe just repeat them. I mean, the pass-through is having an impact on our margin percentage. So that's quite substantial in terms of higher sales with essentially no profitability associated with it. We're not recovering 100% on the inflationary cost increases, as I noted. In addition to that, the production environment continues to be lumpy. We expect that to continue into next year. Then, you know, our sales guidance range is up. If you back out the material pass-through as well as, you know, we are expecting higher tooling sales next year, our outlook actually is resulting in lower volume outlook for next year. The lower volume has some of an impact as well. Yeah. Understood. Thanks, guys. Thank you. Our next question is from Brian Morrison, TD Securities. Please go ahead. Yes, good evening. First question, Fred, maybe just going through the Q3 results, the operating margin. When I look at it on a sequential basis, you know, the production sales are up nominally, maybe 1-2%. I realize there's some mixed benefit from being weighted in the U.S., but if I just look at increments, you're probably up 25-30 basis points in terms of the operating margin relative to Q2, but you're up 170 basis points sequentially. So what are the, I mean, when I take a look at launch costs or lean activity, commercial negotiations, maybe just break down that additional 140 basis points or the additional $29 of EBITDA. Yeah. The volume and mix, you know, volume has an impact, but also we've seen an improved mix in the quarter. I think a bigger impact, and we talked about this earlier in the year, you know, the back half of the year, we're expecting our launch activity and launch costs to start normalizing, and we saw that in Q3. That's just a byproduct of, you know, operational improvements as well as some of the production on some of these programs smoothing out. We saw some of that in Q3, and we continue to expect the back half of the year in terms of launches to normalize compared to the front half of last year. Essentially, everything kind of falling into place. Excellent. Were those launch costs, is that the biggest contributor to that delta then? I'd say that one of the problems with the launch costs was the increased ramp of the customers in some cases. I mentioned this before, that if you're supposed to launch to full volume in a month and it's taking 12, 14 months in some cases, you're not generating the revenue or the smoothness in your operations in order to run like you would normally plan to run. The volumes in a lot of the cases, not all, I'll emphasize that, but a lot of the cases have improved, and those improved volumes translate into our plants into smoother running, and, you know, that's had quite an impact. The better the customer runs, the better we can improve our operation and run with them. We're starting to see that this quarter. Again, I, you know, I don't wanna celebrate yet 'cause there's still a lot of disruption. They don't tend to be a week at a time anymore, but, you know, it'll be a day here, a day there, a couple of days, and it's very disruptive to the workforce because you can't adjust or flex your workforce for two or three days, so you end up with inherent inefficiencies in people because you can't run. Pat, just, I'm not sure it was clear on the call, but are you still insinuating that Q4 is gonna be better than Q3 in terms of financial performance? We said that. We said the second half of 2023 or of 2022 would be better than the first half. We've gotta go and look at some of the releases and so forth. See how people adjust their inventories at Christmas time. Yeah, we get a lot of erratic, and this is even in normal times, a lot of erratic releases that get canceled, you know, a couple of weeks out from Christmas. Depends on how the product's running. They look at their supply chain issues, and a lot of times, unexpectedly, we'll end up, the customer will end up shutting down a week or two before they say they are, and so sales tend to drop a lot of times in December. We do expect strong. Well, we do expect our performance, given whatever sales we have, to be good. Yeah. Okay. Pat, last question, if I can. Just in terms of the guidance. I understand the inputs, why you're taking the forecast operating margin down. It makes complete sense. The question I have, though, is what is factored in for European risk, whether it be elevated energy costs or potential for production curtailments? Do you have anything factored into that? Very interesting question. In terms of energy, so that essentially layers into our commercial discussions and negotiations with our customers. We have managed to offset some of the increased costs with these recoveries, and we're assuming we'll be able to do that next year as well, as it relates to our 2023 guidance. In terms of production volumes? We essentially budget and forecast on IHS. Their current projections would be pretty close to what we are expecting next year and baked into our outlook. All right. Great results. Thanks very much. Thank you. Our next question is from Michael Glen from Raymond James. Please go ahead. Hey, thanks for getting me in. Can you just talk about what's coming up in 2023 for Martinrea in terms of new launch activity? We don't have nearly the launch schedule we had the previous couple of years, but we still have a number of launches like we would any other year in our aluminum group. There's a couple of good-sized ones. There's some volume ups throughout our organization, where customers have come and asked us to increase the level of capacity because they foresee their sales going up in the near future. We wouldn't consider that a full launch, but you are usually adding equipment and changing your lines and things like that. We do see a lot of that right now. I'm trying to think. Yeah, we don't have any. Anything big. Big launches starting next year. We have EVA2, Mercedes EV program that's just launching now and will ramp up next year. Yeah. In addition to that, there'll be some preparation for some upcoming launches in 2024, in particular with GM, their BEV3 EV platform, as well as BT1XX, which is their Hummer EV and their electric pickup truck. And then the, the margin- Go ahead, please. The margin No, I was just gonna. I'll let you talk, Pat. No, no. Go ahead, please. The margin for North America this quarter, like when we're thinking of the programs that factored into that margin, are there many of those programs that are still operating below what the target margins are? Is there a wide delta there? There are a few programs that are not meeting the ramp schedule as planned. A couple of good-sized ones, they've improved. One of the two in particular has improved, but the other is still struggling. Even the one that's improved is off schedule. I foresee those programs getting better next year, especially. I think we'll see better performance from ourselves because, again, the more you can smooth production, the more we can stabilize our operation. We've done a lot despite the fact we get a lot of this erratic production schedule. You know, nothing is better than even flow through the system. I expect that'll continue to improve. We still get surprises. Just today, we had one of our customers, you know, shut down an operation for the next week, totally unexpectedly. Those things happen still more often than we like, and more often than they like too, I'm sure. It's not necessarily even chip related. It could be other components. Yeah. This particular example was actually steering. Yeah, it wasn't chip. Yeah. I think some of those other supply chain issues that have been hiding behind chips, we're gonna see more of. The ones we haven't known about that'll start to appear. Just to try to understand this European energy dynamic. We saw just a huge run in energy prices through the period, through the quarter. When you reported, though, it looked like it was overall a pretty. It wasn't a notable impact in the period, especially when you look to Q2, Q3 versus Q2 over in Europe. When we see those big runs happen, if we see those big runs take place in energy prices over in Europe through the winter, if that happens, should we anticipate that you're passing that through then to customers? Do you have that negotiated now? Well, we're still negotiating, so that would be the intention. We've had some success, but we still have some work to do there. The other thing to note is, you know, this year in 2022, we did have some hedges in place to kind of temper the impact. Not 100%, but we had some. Those are gonna start expiring as well. The premise is, you know, be able to offset it with customer recoveries and so forth. A lot of that work should be done by the end of the year, and we should be going into next year with those frameworks in place. Yeah, don't think that energy prices haven't had a significant impact. They have had an impact on costs and also on production schedules from customers and so forth. You can see our European results aren't nearly as good as our North American results. There's a lot of stress in the system there. We're dealing with it pretty well, but as we said in our remarks, it's gonna be a tough winter in Europe as they deal with what happens when the weather turns cold. Still a large percentage of our energy spend was on spot this year as well, so. Yeah. Would you be okay indicating just how much of an overhang excess energy cost was in the quarter? No. For 2023 guidance, it looks like you're forecasting somewhere over $ 300 million in CapEx. Is that, say, is that sort of the assumption embedded into the free cash flow guide? Our guidance on that hasn't changed. We're expecting our CapEx next year to be in and around depreciation amortization as a percentage of sales, and that should be just under $ 300 million in that range. Okay. Is there any sort of working capital assumption in there as well to think about? I mean, our production-related working capital will flow with sales at typical rates. The one that continues to be volatile and will always be volatile is tooling-related working capital. I think the last couple of years we've proven that we can manage that quite well. Expecting to do the same next year. Okay, thank you for taking the questions. Thank you. Thank you. Next question is from Peter Sklar from BMO Capital Markets. Please go ahead. Good evening. This very elevated level of earnings you have, particularly in North America, like, can some of it be attributed to the outcome of your commercial negotiations and that you had some retroactive recoveries during the quarter? Or is this kind of the earnings level of the company now, you know, in the context of all the pluses and minuses that you talked about? The commercial activity definitely helps. I mean, those deals are quite complex. There's a lot of puts and takes. You know, I think if you look at our historical North America margin, we've been higher than that. I still think there's upside to that outlook. If you think about our outlook for next year, our margin expectation, we're expecting each of our segments to contribute to that. It's not like you got a big whack of recovery that inflated the margin just for this quarter. Is that what you're saying? The bulk of the improvement, and we're at 5% in Q2, 7%. It was volume mix as well as the launch activity that I referred to earlier. Yeah. We had a lot of good improvements in our operations, or I should say, leveling from improved volumes. I would attribute a big piece of it to that. Yeah. I think as we said, you know, second half of last year, we lost in part because customer schedules were going haywire. First half of the year, we said would be better, and they are. The second half's better than the first half, and they are. Next year should be better. That shows a progression in margin overall. The fact that, you know, this quarter was higher than last quarter, the first half is what we were predicting before we were doing the commercial negotiations quite frankly. Right. Okay. As I listen to, you know, management talk on the call, I just wanna make sure I'm interpreting this right. I'm getting the impression that the biggest item for this big jump in operating earnings that you've experienced is launch. The fact that launch costs are going down and, you know, new programs are ramping up, so you're getting contributions. That's the biggest item on the list in terms of contribution. Do you agree with that? It's a big part. Big part of it. Also sales mix. You know, obviously, in any given quarter, depending on what products we're selling in this volatile environment, you know, we see these pretty large mix swings. You know, we end up coming on the right end of that in Q3. Peter, that's a really good question. One of the things, and Fred has a wonderful chart that just shows the downtime from different customers. In the second half of last year, there was a lot of red. In the first quarter, there was less red. Second quarter, less red. Third quarter, less red. That really has a huge impact on the profitability of any operation. When you go stop and start and you can't plan, it's very, very difficult. The third quarter was a lot better than previous quarters, and certainly a lot better than it was, you know, nine months ago. I'll say General Motors is our largest customer, and I'm saying this year in particular, they've actually done quite well in managing their production schedules. Still up and down to an extent, but they've been the best of the bunch. Okay. Yeah. Now- How do I say this? 'Cause I said it last year. When we are shutting down for weeks at a time, you know, we're laying off people and they're not coming back, and that creates instability. As it's just a day here and a day there, you're holding on to the people, and you're paying for them, and they're not doing any work. No fault of theirs, there's just nothing to do. You can't let them go because they won't come back. The less of those random down days, the more efficiency we're gaining in what we're paying our people to do the work that they do. It really does have a pretty significant impact when the customers run. Some customers have lowered their volumes on a daily basis in order to continue to run smooth. That makes a huge impact as well, because we can lower the level of workers we need, but keep them all working all the time, so the efficiency gains there as well. A lot of that's hidden, you know, as we've gone through this the last year or so, and that's certainly helping a lot. Okay. I understand. Rob, I wanted to ask you. On a different topic now. You said something very interesting that, you know. Thank you. Well, you said a lot of interesting things. All right. There was one of the many. I'll get him started. interesting things I wanna ask about. In terms of the situation in Germany, if we have a cold winter and there's energy rationing, you felt confident that the German government would not, you know, ration energy to the automotive industry and the industry would not go down. Is that just kind of you thinking through common sense, or are there people in government you're talking to? I'm just wondering, you know, how you come to that viewpoint? I always appreciate when governments act with common sense. It's not always the case. On this particular thing, there have been several sources. First of all, we're part of a pretty big automotive industry, and we know that the OEMs have been having discussions, and our people in Germany have been having some discussions as well. If you recall, about six weeks ago, the German chancellor was in town in Toronto, and meeting with our prime minister and a number of other folks, and I was an invitee to that. We actually spent a lot of time talking about, well, what do you do about energy? There were two aspects to that. The first one was, you know, them ensuring that they had it, so that basically means securing supply. They were making good progress then, and since then, they still have. Basically, if you look at some headlines, they say, "We're gonna have enough gas." The second thing, though, is, you know, once you have the gas, you say, "Well, what's the pricing of it?" Right? France at that time had already pledged something like EUR 20 billion to help out their industry. There were discussions at that time about what Germany's gonna do with respect to their industry. You can talk about rationing and so forth, but, you know, the German OEMs are quite clear that, you know, they're not gonna be making vehicles if they're gonna lose thousands of euros per vehicle because of the energy costs. We're right behind them as a supplier saying the same thing. The number that I've heard at that time was perhaps as high as EUR 200 million. EUR 200 billion. Billion, sorry. Yeah, EUR 200 million wouldn't do much, but EUR 200 billion. Those discussions are still moving forward. You know, we've heard that as recent as the last 48 hours that they're working on a package. At the same time, we'll see how this goes, but you know, what happens with gas prices, they've been all over the place and we'll see what happens there. I think there's gonna be a solution in that context, but we'll have to see how it plays out. The reality is that it's been made very clear in Germany and some other jurisdictions that while it may be a tough winter, the checkbooks are gonna be opened in order to ensure that you don't shut down the economy. In Germany, of course, auto is the largest part of that economy, very big players. It makes the economic cost to Germany actually higher if their industry goes down than if they subsidize energy prices. Yeah. That's that. Yeah. Rob, I didn't understand. These meetings with the chancellor, did you attend some of these meetings as industry representative? Yep You're hearing from people? No, no, I was there face-to-face. They said, "Don't worry, we got it covered." That's when I was the guy who said, or I was one of the guys who said, "It's great that you got the gas, but what's the price? Okay. Got it. Fred, just one last question. I don't know if you have it at your fingertips or not. If not, it's okay. I think your total tooling revenues were $67 million. Can you break that down by the three geographies? Yeah, I don't have that in front of me. I can get that to you. Okay. Maybe Neil and I can circle back with you after the call. Okay. Thank you. Thank you. Our next question is from Krista Friesen from CIBC. Please go ahead. Hi. Thanks for taking my question here. Just to follow up on the, on European energy. For your 2023 guidance, are you assuming that there will be some subsidies that kick in, or are you just assuming that you'll be compensated from the OEMs kind of at the same level that you're being compensated at the moment? How are you thinking about the energy price for next year? We are assuming essentially that we'll be able to offset at a particular percentage consistent with what we're kind of seeing this year either in the form of customer recoveries or it could be in the form of government relief as well. It depends on what this package that's being proposed look like and how we can get access to it and our customers to that matter. This is November 1. We have to see how a lot of things play out with the war and the gas price and that type of stuff. You know, in that sense, we'll play it the same as other folks. There is a resolve amongst the government and the industry and other industries to try and, you know, minimize the impact to industry so that industry can stay open and employ people. Okay, perfect. Just looking at production, we're a month into Q4 here. Has that. If you were to compare it to, let's say, the first month of Q3, is there a notable difference in the smoothness of production schedules? Or is it relatively similar to what you saw at the beginning of Q3? I would call it similar. Would you agree? Yeah, I would agree with that. I think we alluded to it earlier. As we kind of enter into the holiday season, that's really, you know, where the question marks on what the volume will look like as we go into the end of the year and into the holidays. That's where the customers often adjust. Those adjustments might be a little more erratic due to the supply chain issues they're having. They may, you know. One of our customers last year ended up taking a lot of their lines down so they could come out of the chute in January and run smooth. In that particular case, it worked really well, and they've run probably one of the best this year. I mean, they've done very well comparatively. We don't know what we're gonna see till we see it, unfortunately. Right. Okay, great. Just one last one. Can you remind us what leverage ratio you're targeting here, given how much free cash flow you're generating and will be generating? What you're kind of looking to get to? Our strategy hasn't changed longer term. We target to be in and around 1.5 x of EBITDA. That would be something we'd be targeting and not necessarily looking to change that at this point. Yeah, we're making great progress. Okay, perfect. Thank you, and congrats on a good quarter. Thanks. Thank you once again. Please press star one if you have a question. Next question is from Ben Jekic from PI Financial. Please go ahead. Great quarter, guys. All my questions. Thank you. have been answered. Thank you. Thanks. Thank you. There are no further questions registered at this time. Mr. Wildeboer, I will transfer the meeting back to you. Okay, thanks very much everyone for calling in this evening. If you have any further questions, just contact us, either Neil or Fred or Pat or I, and we'll try and take your call and help you out. Have a great evening. Thank you. Your conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.