Good evening, ladies and gentlemen. Welcome to the 2023 Second Quarter Results Conference Call. Instruction for submitting questions will be provided to you later in the call. I would now like to turn the meeting over to Mr. Rob Wildeboer. Please go ahead. Good evening, everyone. Thank you for joining us today. We always look forward to talking with our shareholders. We hope to inform you well and answer your 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 June 30, 2023. I refer you to our usual disclaimer in our press release and filed documents. I will speak, then Pat, then Fred, and me again briefly, and then we will do some Q&A. Before Pat and Fred focus more particularly on the company, our progress, and our results, a few overview comments on how we see the automotive world in mid-2023. We believe the industry is in the early innings of a strong period of stability and overall growth in volumes, especially in North America. We went into the reasons for this in some detail in our past two annual shareholder meetings, including our last one in June, and on some of our recent calls. I'm gonna make just a few quick points, given recent developments, to bring it to the present. The North American economy is in pretty good shape, as we have been saying for many months, and now most agree with us. The underlying U.S. economy is solid, unemployment is at low levels, and there is strong underlying demand for housing and autos. People's confidence is increasing. People know they can find work. The balance sheet of the typical U.S. family is actually pretty strong, given a decade of higher savings rates, asset price increases, and in recent years, lots of free government cash. All this is good for the U.S. consumer, who drives 70% or so of the U.S. economy. Second, there remains a shortage of vehicles, and inventory, while being rebuilt, has some ways to go. U.S. SAR and production levels are rebounding but are still not at historical levels, by which I mean average levels over the past 20 years, roughly the lifetime of our company. We see production and sales of vehicles going up in 2024 from 2023 and up in 2025 from 2024. A good background for our business. Third, let me address interest rates. Governor Powell and the Fed just raised rates to their highest level in 22 years. Interestingly, our company started 22 years ago, so at least in terms of interest rates, we're back where we started. Note that in 2001, U.S. SAR was higher than it is today, when U.S. population was 285 million people. Today, it is 340 million. Think about that. I do believe that today some people are holding off on auto purchases because of higher interest rates, not to mention high auto prices, but the reality is that people get used to paying interest and the market adjusts. When you're used to 0% financing, a rate of 2.9% or 3.9% looks punitive. When rates are generally over 5% for a while, such an interest rate looks like a bargain, and I imagine we will see some competitive auto financing in the next few years. I also believe the trend line of rates will be lower over time. We are at or near the peak. Having said that, I don't have a ton of faith in the Fed. They made a number of mistakes over the past few years. Fourth, inflation is coming down by whatever measure. Note that we have seen reduced prices or a reduced rate of increase in prices in many areas recently. We also believe the rate of wage inflation to help workers deal with inflation in the economy will moderate. Speaking of workers and inflation, we know there will be UAW and Unifor contract negotiations in the next several weeks or months. There is always the possibility of a strike, which of course, is a short-term disruption. The impacts tend to be transitory in nature. Car makers tend to make up any production lost. A lost car sale today is a future sale. Overall then, our industry is in pretty good shape, as is our company. It's not to say, of course, there are not or will not be some headwinds. Supply chains have challenges, albeit reduced. There are geopolitical issues. EV sales projections may be too optimistic. OEMs must learn to make money on EVs, et cetera. I think there is a tendency to be overly negative when looking at things through a short-term lens. Sometimes it helps to take a step back, look further out, and put things in perspective. With that said, here's Pat. Thanks, Rob. Good evening, everyone. Our second quarter financial results were strong in an improvement over the prior quarter. Adjusted EBITDA of $161 million was yet another quarterly record and adjusted operating income margin came in at 6.1% in the range of our 2023 outlook between 6% and 7%. As we said previously, we expect results to continue to improve as supply chain disruptions subside and production normalizes. Challenges from ongoing erratic production, supply chain bottlenecks, cost inflation, and tight labor market conditions, while continuing, have improved compared to last year and we expect will continue to lessen in the months and quarters ahead. At the same time, we continue to make progress on our commercial activity, offsetting the inflationary costs and volume instability we've been facing. These commercial settlements have been one of the key drivers of margin improvement that we have seen over the last year or so, and I will elaborate on this more in a few minutes. Looking forward, we continue to expect 2023 to be better year-over-year, with higher production volumes, margins, and free cash flow compared to 2022. We see the early stages of a strong cycle in automotive, with the majority of our plants running near capacity. As such, we are confirming our 2023 outlook, which calls for the total sales to be between $4.8 billion and $5 billion, adjusted operating income margin to be between 6% and 7%, and free cash flow to be in between $150 million and $200 million. We continue to see this guidance as reasonable and achievable. Automotive sales are proving to be more resilient than many expected, with seasonally adjusted annual rate of sales, or SAAR, in the U.S. coming in at 15.6 million units for the second quarter. A healthy level as demand continues to trump the impact of rising interest rates and inflation on consumer buying patterns. Operationally, we are performing at a level that has become consistent with or better than where we were in 2019, just prior to the pandemic. As expected, free cash flow was positive in the second quarter. Fred will elaborate on the various puts and takes in his remarks. The key point is, we continue to expect that 2023 will mark a turning point in the evolution of our company, establishing ourselves as a consistent generator of free cash flow. Turning to our global operations. In North America, our adjusted operating income margin remained strong in Q2, aided by higher production sales, efficiency improvements and commercial settlements, partially offset by the dilutive impact of higher tooling sales. Volumes improved quarter-over-quarter, as certain programs that were disproportionately impacted by supply-related disruptions in Q1 rebounded in Q2. We continue to operate at a healthy margin level in North America. Production is generally improving, we are benefiting from the reduction in some launch activity of new programs. Supply chain pressures continue to ease, though OEMs are still facing part shortages in some areas, some driven by constraints in the Tier 2 and Tier 3 supply base. We've been fortunate during this period that we have not inhibited our customers with our own supply chain. Of course, bottlenecks at any point along the supply chain can impact the overall level of production, and more importantly, the stability of production. Additionally, labor remains tight in certain locations, though the situation is improving. On the cost side, inflationary headwinds are generally better, though persist in some areas of the business compared to last year. Our efforts to offset these costs through our commercial activity are ongoing and will continue through the rest of the year. Turning to Europe, adjusted operating income was positive in the second quarter, up from the loss in Q1 on lower quarter-over-quarter production sales. While favorable commercial settlements allow us to turn a profit in the quarter, margins remain below what we think they ultimately will achieve in this segment, largely because OEM and production volumes in Europe are currently falling short of planned levels. European results are expected to continue to be positively impacted by favorable commercial settlements during the back half of the year, offsetting some of the production volume headwinds and inflation we have and are currently experiencing. In our rest of world operations, a small portion of our overall business, representing about 3% of our second quarter production sales, adjusted operating income was lower quarter-over-quarter, given the continuation of lower-than-expected production volumes in China and the absence of some indirect cost recoveries in Brazil that benefited us in Q1. I now want to take a moment and talk about our commercial activity in more detail. It's a key issue, as commercial settlements have been an important contributor to our financial performance over the last couple of years. Let me provide some insight on how these agreements work and on how they vary in structure. First, commercial negotiations are typically complex and multifaceted. There's a lot of data exchanged between ourselves and the customer. When you're asking customers for money, you need to present a detailed account of your cost and make a compelling case to show your request is reasonable. You must establish credibility in these discussions, and you do that by knowing your business and knowing your cost structure inside and out. Second, agreements can take a variety of different forms. For example, they can result in an increase in piece price or the price that's paid for each part over the life of the contract. These agreements are ideal, as they essentially lock in pricing over the life of the contract. Depending on the situation, OEMs may be reluctant to do this, particularly in an inflationary environment where costs are ultimately expected to come down. Energy in Europe is a good example. In many cases, OEMs will pay to cover a portion of the inflationary burden over a specified time period. This can be retroactive, or it can be in the future, or both. You renegotiate with the customer for subsequent time periods. These efforts are ongoing and can result in short-term spikes in income in some quarters. The third point is commercial activity is a normal part of doing business. It's something that we're always working on in one form or another. The key issue at hand is, in the last few years, the activity and the settlements have been more pronounced, given the unprecedented increase in input costs and lower production volumes. This activity will certainly continue beyond this year, though we expect at a lower level. Once contracts roll off in normal course, we will reprice agreements based on prevailing market costs for both replacement work and new projects. Finally, I want to emphasize this point, the timing of commercial settlements can be somewhat erratic, which can result in some variability in our quarterly results. This is particularly true in our European segment, where margins are lower, or the rest of the world operations, which are smaller. We continue to negotiate commercial settlements in all regions. Margins will benefit from those settlements when they occur. Our motivation in these negotiations is to always get the best deal while maintaining a positive relationship with our customer, as opposed to managing to the quarterly expectation. Our business is best looked at over longer periods of time, something to keep in mind as we move forward. I'm pleased to announce that we have been awarded $150 million of new business since our last call, consisting of $90 million in our Propulsion Systems commercial group, including $65 million with General Motors, as well as other work with Daimler, Volvo, and $60 million in our Lightweight Structures group for various products with Mercedes-Benz and General Motors. Year to date, new business awards now total $220 million, which already exceeds the total amount of work that we won in 2022. Overall, a good quarter and a good first half of the year, both in terms of financial results and new business wins. I want to thank the Martinrea team for their dedication and hard work in delivering these results. With that, I'll pass it to Fred. Thanks, Pat, good evening, everyone. As Pat mentioned, our Q2 performance was solid, with adjusted EBITDA setting another quarterly record for the company. Overall, our Q2 financial results show a continued progress in our operating margins, free cash flow, and balance sheet, which we expect will continue in the back half of the year. Taking a closer look at the results quarter-over-quarter, we generated adjusted operating income of $82.4 million in the second quarter, up approximately 10% over Q1, on production sales that were roughly flat at $1.25 billion, as higher North American sales were offset by lower sales in Europe. Adjusted operating income margin came in at 6.1%, higher than the 5.8% we generated in Q1, despite a 71% increase in tooling sales, which typically are in low or no, or no margins for the company. Adjusted net earnings per share came in at $0.62 in the quarter, higher than the $0.54 generated in Q1, largely reflecting the higher operating income. Free cash flow was positive at $25 million, an improvement over the -$32 million generated in Q1, reflecting higher EBITDA, lower CapEx, and a Q1 seasonal increase in working capital. Working capital levels remain relatively flat quarter-over-quarter in Q2, as expected. We remain committed to our free cash flow outlook for 2023. Extrapolating Q2 free cash flow being the most recent run rate over the remainder of the year, the additional drivers in the back half of the year that will help us get there include higher EBITDA in the back half of the year, assuming a continued improvement in the overall production environment and benefits from ongoing commercial activity, positive working capital flows, in large part driven by the expected seasonal unwinding in working capital during the back half of any given year, and significantly lower cash taxes in the back half of the year, which is essentially a timing issue, as cash taxes were higher than normal in the first half. While free cash flow is partly dependent on macro factors that are outside of our control, we have a good line of sight on capital spending, which is expected to come in around $300 million for the year. This is a significant reduction from what we spent in 2022. Looking at our performance on a year-over-year basis, and I won't spend too much time on this, second quarter adjusted operating income of $82.4 million was up 81% over Q2 of 2022, on production sales that were 19% higher. An adjusted operating income margin of 6.1% was 200 basis points higher year-over-year. Recall that at this point last year, we were still in the early stages of digging ourselves out of a low point in our industry, when supply-related production disruptions were at their worst. While the strong year-over-year performance is nice to see, it's really the sequential improvement that tells a story of how we are performing operationally. Turning to our balance sheet, net debt, excluding IFRS 16 lease liabilities, declined by $18 million quarter-over-quarter to $937 million in Q2. Some good progress. This includes the funding of approximately $10 million spent on share buybacks during the quarter through our Normal Course Issuer Bid, which Rob will discuss further in a moment. Our net debt- to- adjusted EBITDA ratio continued its downward trend, ending the quarter at 1.71 x, down from 1.9 x at the end of Q1 2023, and within striking distance of our long-term target range of 1.5 x or better. Our leverage ratio should naturally improve in the coming quarters as we generate an increasing amount of free cash flow. Overall, we are pleased with our performance in the second quarter. The environment continues to improve. We're making great progress operationally. Our balance sheet is in great shape, and we are executing on our capital allocation priorities. Things are coming together. To our shareholders and all our other stakeholders, thank you for your continued support. With that, I now turn you back over to Rob. Thanks, Fred. One final brief discussion about capital allocation now that you have heard our operational and financial position. Our views on capital allocation are provided in an investor note on our website for reference. In Q2, we generated approximately $110 million in cash from operations, and here is how we allocated it. First, capital expenditures were about $76 million. As we have always stated, we invest in the business first. We need a strong core. As we have discussed, our investments have to meet hurdle rates on new or replacement business. We also look to invest strategically in R&D, acquisitions, and new technologies, and so we did that in the quarter also, to the tune of about $1 million. Note that in the past year, we have invested in aluminum-air battery technology, graphene-enhanced batteries, additive manufacturing technology, leading-edge software programs, unique giving programs, and many other product and process improvement technologies. We also realized on our VoltaXplore investment by exchanging our Volta shares for NanoXplore shares, basically doubling the value of our investment. As you know, automotive is a leading technology and innovative industry, we believe we are leading edge in many areas. We also paid down some debt, as Fred noted, with net debt about $18 million lower quarter-over-quarter, we strengthened our balance sheet. A strong balance sheet is an advantage in our industry, where we have seen a lot of supplier distress over the years. Customers do not want to worry about the creditworthiness of their supply chain, as a financially distressed supplier becomes a problem for the customer. We paid our usual dividend to our shareholders, approximately CAD 4 million, or CAD 16 million on an annualized basis, providing our shareholders with a positive return on their investment. Finally, we purchased approximately 1% of our shares for cancellation under our Normal Course Issuer Bid, or just over 815,000 shares. Our average price was approximately CAD 12.30 per share, so we believe it was good value. Total cash spent was just over CAD 10 million. At our enterprise value- to- EBITDA multiple, which is at or near our historic low, we believe an investment in our own company is a good investment. It also rewards our supportive shareholders with a greater piece of the company without having to write a check. Note that our NCIB is suspended during our blackout periods. We intend to be back in the market again this quarter. We anticipate with our increasing free cash flow profile, we will continue to have greater flexibility to deploy cash in the best interest of the company. Now it's time for questions. We see we have shareholders, analysts, even some competitors on the phone, but also employees. 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, Mr. Wildeboer. We will now take questions from the telephone lines. If you have a question, please press star one on your devices' 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. Our first question is from Krista Friesen from CIBC Capital Markets. Please go ahead. Hi, thanks for taking my question, and congrats on the quarter. I was just wondering, in Europe, the weakness that you're seeing there, is that broad-based, or is some of that specifically related to the Metalsa assets that you acquired a few years ago now? I wouldn't say it's specific to Metalsa. I think it's broader in terms of our product portfolio there and volumes on certain platforms. There's one customer in particular that we saw a decline in volumes. We're keeping a close eye on that. Hopefully, that's not a trend going forward, but we were down quarter-over-quarter, and it wasn't necessarily one specific location. It was across the region. Okay, great. Maybe just on a different point, how are you preparing for potential strikes at one of the or more than one of the Detroit Big Three? Yeah, just what Martinrea is doing to get ready for that. Yeah, we're really more focused on the response, if one of them goes on strike or multiple, you know, how we stop production, you know, shipping, those types of things, mostly operational. There's not much we can do in the big picture, but, as far as, you know, cost-cutting in the short term, those types of things, we'll put our plans in action over the next couple of weeks and then wait to see what happens. We, we, we had a similar situation back in 2018, was it? '19. 2019, when GM went on strike, we had prepared, you know, how we were gonna respond, how we were gonna temporarily cut costs. It lasted for a little bit. They made up all the production afterward, actually into the following year. As Rob referred to earlier, you know, from an overall volume point of view, they'll, they'll tend to make up all their production on overtime or whatever they gotta do to get the numbers. I, I, you know, we'll prepare like we did last time, essentially. Of course, keep an eye on it as negotiations go, because, you know, we'll, we'll find out in the next couple of weeks if there's a specific target or if there's multiple targets. For sure. Would you expect the, if there were to be a strike, it would be kind of similar repercussions to the 2019 GM strike, or are things a little bit different this time around, and the supply chain is quite a bit more fragile than it was, four years ago? Yeah, you know, there's a lot of noise, you know, as you, It's been four years. A lot has happened in the last four years. You know, the union has, has things that it wants to accomplish. I think the OEMs are also, have learned that they can make a lot of money when they don't have too much product. You know, how they're going to approach it in the past would have been to build inventory ahead of an anticipated strike. We haven't seen that, which means they'll build after. I have not seen the normal preparation that we would typically see. Not sure if we understand why that is just yet, but my belief is, you know, selling 1 car for a lot more than they used to versus selling two cars at cost, makes a big difference in how they react. Yeah, you make a good point just in the potential fragility of certain suppliers. As opposed to 2019, I think there is some fragility in the Tier 2 and Tier 3. We're in a strong position. We've always used those opportunities to take advantage of, of, of those opportunities. Customers need strong suppliers. I think that's one of the comments that we, that we made in our comments. Ultimately, you know, this is an industry that is used to shutdowns. Some of them are different than others. COVID is different than a strike. A strike is different than the usual shutdowns in July or around Christmas time in order to manage inventory. You know, we'll see, we'll see how it goes. It could be that, you know, you have a two-week strike, and then people run through Christmas, and make it up. With respect to what's exactly gonna happen, I think, you know, we're listening to the conversations and having conversations similar to what all the analysts on the phone are doing, I think. I've been in this industry, I don't even remember now, 30-40 years some place. Too long. Too long, though. Never too long. You know, every time I've seen a strike, and I, I worked for an OE for 24 years as well, so, every time I've seen a strike in my memory, the volumes are made up after the fact. It's just gonna be a matter of how much make-up there has to be, in my view. Thanks. I, I appreciate the color, and I'll jump back in the queue. Thank you. Thank you. Next question is from Michael Glen, from Raymond James. Please go ahead. Hey, good, good evening. Just to think about the, what, what's being talked about in terms of a strike, clearly, the unions are asking, first of all, like, as a starting point, some fairly large wage increases. If, if we think about where your position, where your plants are positioned in proximity to those OEM plants, does, does that sort of labor inflation, does that necessarily spread? Do you have to reflect that as well across your facilities? No. When you. Go ahead. In this case, we're actually ahead of them, okay? Keep in mind that the wage inflation that took place during COVID, the unionized plants that have not renewed contracts, essentially the Detroit Three, haven't made the adjustment that everyone else has already made. Though the wage increases the unions are asking for seem very high, you know, the industry probably adjusted to a good portion of that, you know, two years ago, back when we were having employee troubles, especially in the United States, when we were having trouble keeping people. Unlike the past, where the union might set the precedent of, you know, future wage increases, in some ways, it's happened in the opposite because of the pandemic. There's already a measure that the unions and, and management can use in, in the industry that shows that, you know, wages have increased across the board. I, I'm not concerned about the residual wage, that I might have been concerned about years ago, because, again, you know, it started with the supply base, more so. Okay. Can you remind, or can you give an indication what your union penetration rates are throughout North America? Yeah, pretty, pretty low in, a few plants in the U.S., which we've already resolved. We're four years away from, from another, negotiation. In Canada, it's about 2 as well with Unifor. We, we've pretty much already settled with our unions. In other countries, the, you know, the country-wide, Mexico, all plants have unions, Germany, Spain, same thing. Yeah, all our union plants in Canada and the United States are under contract for multiple years. Yeah, we settled over the last year or so. Okay. So I, I understand the, the commentary surrounding the commercial recoveries. Well, I understand some of it, but can you just help us, like, for, like, if we're thinking of North America, is there a way to frame for us? Like, you put up a decent operating margin in the second quarter in North America. It sounds like there was some commercial recoveries in there. They, like, that may or may not happen in Q3, then? Yeah. So think about it this way: Let's say you pay $10 for a part, or we get $10 for a part, and inflation goes up 20% or $2, and we negotiate with the OE to recover as much of that as possible. If we're really lucky, we get $2, and you get it in the piece cost. Everyone recognizes there's a portion of that inflation that will go back down again. It's not gonna continue at the same rate. Energy is probably one of the best examples. You negotiate with the OE on that new price. In the best case, and where you always try to focus, is getting it into the piece cost or into an index which adjusts to the piece cost, which we've done a lot of. What will happen sometimes is when you're negotiating that, this retroactive, you know, you say, okay, it started in January 1st, or it started in 2022, or whatever, and it's different for all the parts and the different products. You might see a portion of that will spike, and then level out, and then you have a, you have a new premium on top. A lot of times that's not gonna reach where you were before, so your margins are, are compressed a little bit because getting 100% recovery is difficult because there's some, some variance in there, as I said. We've done a pretty good job of, of recovery. I'd, I would say I'm very happy and proud of, of the efforts everybody's put in, and we have a very good view of what our costs are, which helps us with our customers. I, I would say it will continue throughout the rest of this year. It'll again, vary. You'll see it into next year, but as I think, especially the latter part of next year, you'll start to see it normalize. When I say normalize, I, I just mean that it's always something that's going on. It's just at a much lower level, but we're constantly in commercial negotiations. It's just that because the inflation rate went so high, so fast, the activity level is significantly higher the last few years than it normally would be. Look, a lot of people like to focus on the quarterly results. That's why we have the discussion. That's why we have the annual guidance. Yeah. I think within that, that's what you got to look at. That's a really good point. You know, you can settle faster to hit a number in a quarter. You can work it, work it, work it, and get the right price, which is better for you in the long term, and our tendency has been to do the latter. Okay. if we're thinking about, if we see, I know, I know we don't have a perfect view on it, because we don't know the amount of commercial recoveries, but within North America, as you look to the back half of the year, you see margin improvement continuing, excluding commercial recoveries. We're running pretty well right now. That's why we give you the annual guidance. You know, that's a leading question. I think you just follow the discussion that we've got. Yeah, I, I, I had made a comment in the, you know, earlier that, that our production levels are getting in or better than in some cases, where we were in 2019. I'm, I'm feeling pretty good about our operations. Yeah, our operations are running well. Okay, thanks for taking the questions. Thanks. Thank you. Our next question is from David Ocampo from Cormark Securities. Please go ahead. Mr. Ocampo, your, your line is opened. Sorry about that. I had it on mute. I just wanted to follow up on Chris's question, as it relates to Europe. I mean, it, it does seem like there's a pretty clear line of sight of, of improving those operations. The expectation, I mean, if I, if I kind of do some back of the envelope math, it, it, it suggests that you guys are gonna get into that low to mid-single digit EBIT range for, for Europe. Is, is that the right way of thinking about it, where we should see a quick snapback in Q3 and Q4? I, I think there's a nuance to that. I mean, I think our view is, is there's upside in Europe. Right now, we're, we're dealing with some, some volume headwinds, so we're wrapping our heads around that and, and see how the next couple of quarters go from that perspective. I got some specific platforms and customers that are impacting that. Obviously, the next couple of quarters will be dependent on that. In addition to that, just to kind of go off the discussion around the commercial activity, you know, there's quite a bit of commercial activity still ongoing. Some of it's earmarked for Europe, so we're expecting that, in the back half of the year, you know, you'll get a bit of a lift from some of that activity as well. Obviously, the overall performance longer term will be dependent on the volume environment. Got it. And, and Fred, maybe the last one for you. If I kind of take a look at the, the working capital, say, since 2021, it's been a pretty big drain on the company. As we kind of go into 2024 with, with increased volumes, are, are you still expecting working capital build, or, or is there gonna be some sort of release in, in the coming quarters or coming years? Yeah. Well, I think, you know, we've seen a big increase in our sales too, right? There's a bit of a connection there. Obviously, working capital is involved with that. I think for this year, you know, we're expecting, you know, typical seasonal pattern. At the end of the year, we're gonna expect some unwinding, just based on seasonality, and we obviously saw the reverse of that in Q1. Heading into next year, depending on the sales level, it should probably hover around similar levels going forward, dependent on volume and so forth. I'm not expecting a huge reduction over the medium term. Okay. That, that's it for me. Thanks a lot, guys. Thanks. Thank you. Our next question is from Tamy Chen from BMO Capital Markets. Please go ahead. Good afternoon. Thanks for the question. I just had 2 quick clarifying ones. Back on Europe, if you try to back out the recoveries, I'm just trying to understand the underlying business right now. Is that generating positive EBIT at this point? We're not gonna get specifics on the commercial magnitude and items. Obviously, there's some sensitivity around that. Obviously, we were faced with some volume headwinds, so quarter-over-quarter, there was a decline just based on that. I think I'll leave it at that. Again, going forward, we have some commercial activity that's still ongoing. We've got to close those out before the end of the year, and some of that will go back to beginning of the year, right? Again, there's a timing effect, which we're trying to explain, but it's really hard to put your finger on and for you guys to model well. I appreciate the complexity here, but the reality is, you got to look at it in, in totality for, you know, a longer period. Yeah, the underlying business includes the commercial relationship, right? We make parts, we get revenues, we have costs. How much we get depends on the commercial relationship, which depends on the contract and any amendment thereto. You know, at the end of the day, if your revenues exceed your costs, you're in a margin, and that's, that's where we'll be. Right. Okay. In terms of improvement in the second half, this is in reference to just an earlier question. Just wanted to make sure I understand what you're saying. It sounds like the improvement in the second half is more so due to just the timing of the recoveries, because in the second half, it tends to be a seasonally, you know, lower period. Or are you specifically anticipating, for example, in Europe, that one particular customer, like production, will also improve in the back half versus the first half for you? I, I think it's early to tell whether we go back to normal seasonal patterns from a volume perspective. I, I think we're you know, the industry is digging themselves out of a hole. Inventory levels remain low. It's really hard to see whether or not in the back half we end up going back to those typical patterns. Now, we did see a bit of a low point in Europe, so you know, the hope is that some volumes recover in Europe. On top of that, as I noted, the commercial activity should help as well in the back half. Got it. Okay. And. Oh, sorry. There's, there's still, you know, if you take volume and put it aside, and just even it out for the moment. Operationally, we continue to get back to the normal levels. The plant we, we got from Autoliv continues to improve, as we've said in the past, so pretty happy overall with, with the operational performance. I, I, I see upside, as we go forward. Again, volume has to be there. Got it. Thank you. Thank you. Thank you. Once again, please press star one if you have a question. Our next question is from Brian Morrison from TD Securities. Please go ahead. Hi, good evening. Hi. Fred, when I look at sort of investor focus on the name, you know, operating margin, you tick the box. Leverage, you check the box. Europe, you're back to positive operating margin. Free cash flow, I want to talk about for a sec. you're flattish year to date, and you're still targeting $150-$250. I get the drivers. The one question I had, you made a comment on cash taxes paid. I just quickly looked it up. It looks like cash taxes, you've been about 56%-57% of your EBT to date. I mean, your cash taxes in the back half of the year could be a big swing. I'm just wondering, how should we think about that in terms of a percentage of EBT? Yeah, absolutely. just to clarify, the guidance is $150-$200. You said $250, but just. I'm sorry. Just the same. 150-200, the same as 150-800. Yeah. Anyways, yeah, you're, you're, you're spot on. I mean, you know, if you look at our last number of years, in, in terms of patterns, the back half of the year from a free cash flow perspective, has always been significantly better than the front half, and cash taxes is usually an element of that. A lot of these installments, cash installments, tax installments, are driven off of prior years, so a lot of them end up being front-end load on the front half. I'm expecting cash tax in the back half to drop significantly, compared to the front half. That's one of the levers. The unwinding of the working capital is, is another big one, that should happen as well, just seasonally. The potential upside in EBITDA as well, depending on the volumes course and then some of the commercial elements. I mean, the, the roadmap is there, and that's the reason why we confirmed our guidance for the year. Even regular EBITDA is already positive, so. Yeah. Yeah, sorry. Obviously, EBITDA grows, reversal of working capital, CapEx goes down, and then these cash taxes are significantly lower than the first half. Yes. Yep. Gotcha. Okay, then the other question I have is your leverage. You've done a great job since the pandemic, reducing your leverage here 1.7 x. With the cash flow you're forecasting in the back half of the year, you're going to be well below your target, assuming normal course operations, of course. I guess M&A is sort of sounds like it's not in the picture here. Should we forecast sort of leverage of 1.5 x, and that's how active you should be in your NCIB? We'll, we'll have the discussion with our board every quarter. The discussion this time, we have a Normal Course Issuer Bid out there. We were, I think, fairly active in Q2, like 1% of your outstanding shares is there. So, so, we'll be buying in this quarter. I don't want to, you know, handcuff the board on the next one, but I think, you know, we indicated when we did our NCIB that we'd buy up to 5 million shares. We're well into that. We anticipate buying a significant chunk of it. We'll see how the market is and all that type of stuff, but we've got a lot of cash flow to generate or that is being generated, and that's a good deployment of cash. We think an investment at the EBITDA, EBITDA levels that we're at is a pretty good investment. I think a number of our shareholders agree with that. At the same time, we like strengthening the balance sheet, too. In terms of M&A and, and strategic investments, we've made some strategic investments, as you know, but you, you don't have to spend a lot to make an investment in technology very often, some of the stuff that you're seeing. We're balancing that pretty well, I think. It's nice to be in a position where, you know, your discussion is, how am I going to allocate my cash? For sure. Sorry, one last question I want to squeeze in. Fred, what's your effective tax rate for the year? We, first half, we were around 20%. I'm expecting the back half to be something similar, maybe a little bit higher, but not much. That's always dependent on, on mix as well as some of the, some tax planning strategies that we have in front of us. All right. Makes a lot of sense. Thanks very much. All right. Thank you. Thank you. Thank you. There are no further questions registered at this time. Mr. Rob Wildeboer, I'll return the meeting back over to you. Thank you very much, everybody. I know you've had two earnings calls in the last two hours, and you're getting ready for dinner. Thank you very much for listening to our presentation. Feel free to contact us at the numbers in the press release at any time, and 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.