Welcome to the results conference call for 2022 at CIE Automotive. Today we have Jesús María Herrera, CEO, and Lorea Aristizabal, Director for Corporate Development. At the end of the presentation, there will be a Q&A. I'd just like to remind you that it will only be possible to ask questions in writing via the tool provided on the webcast. Now I'll hand over to Lorea. Go ahead, please. Good afternoon, everyone, welcome to the results conference call for the year 2022 at CIE Automotive. Let's begin with a quick overlook to contextualize this year, 2022. After the pandemic in 2020, we expected that 2021 with a strong recovery, but the reopening of the markets clashed with the tensions in the supply chain, especially with the shortage of semiconductors in our industry and with the start of a new inflation era on several fronts: energy, logistics, labor. Because of this, vehicle productions only recovered 3.5% over the base of 2020 that was very much depressed by the pandemic. It seemed that 2022 was going to correct all the misadjustments in supply and demand, and that we were going to come close to a certain normality. Reality has been very different. The invasion of Ukraine, additional tensions in the supply chain, semiconductor shortage, more rises in the cost of energy and labor, inflation out of control, increase in rates. A figure, since the beginning of last year, IHS has reduced its volume forecast for the period 2022, 2025 by more than 20 million vehicles. We are living through a new and complex reality, we're going to review the headlines of how this reality has affected the various markets. Europe, the only market that has shrunk in 2022. 15.4 million vehicles were produced, 1% less than in 2021, and approximately 30% less than in 2019. The Ukraine invasion deepened the weaknesses of the European market, only OEMs in a very agile way turned around supply problems like wiring. Nothing has been enough to end the year on a positive note. North America, less vulnerable than the European market with a more solid demand. 14.3 million vehicles have produced, 10% more than last year, although approximately 10% less than in 2019. A very stable profile during the year with four almost identical quarters. China, with 26.4 million vehicles, 6% more than 2021, and almost 10% more than before the pandemic. Two keys to understand this market in 2022, COVID and incentives. There was a significant drop in production in the 2nd quarter because of the strict government zero-COVID policy, but it has since been removed. With the provisional implementation of stimuli during the second half, production levels over 7 million vehicles have been achieved in the 3rd or 4th quarter. India has exceeded, for the first time in history, 5 million vehicles produced, 23% more than in 2021 and 2019. A country that has become the fourth world producer behind China, U.S., and Japan, overtaking Germany. Brazil, a sequential improvement during the year with awaiting demand that has been responded to as the bottlenecks have been softened. 2.2 million vehicles are produced at 5.5% more than in 2021, although it's still approximately 20% less than before the pandemic. With all the above, a global market that has grown by almost 7% in 2022, reaching 82.4 million vehicles produced, which remains approximately 10% below the 89 million in pre-COVID levels in 2019. This market review shows how the negative impact of the various variables mentioned at the beginning of the call have not been homogeneous in the various geographies. The annual results are also showing us that it hasn't been the same for all players on the market. We once again highlight how the geographic and commercial diversification of CIE is its main tool to mitigate risk, and it's our key lever to generate value to the extent that in a really complex year like 2022, we have obtained the highest results in our history. Before reviewing these results, I would like to remind you all that on December 15th, 2022, the board of directors of CIE approved the strategic decision of discontinuing our forge activities in Germany, which now appear under the heading Discontinued Activities, both in the P&L for 2022 as well as the P&L for 2021 that is presented for comparison purposes. Talking about results, we're referring always to comparable results, always using the P&L with the German discontinuation. In the quarter, the organic growth sales have been at 21%, representing an outperformance of 8% over the market. An outperformance which has been accelerated in all markets in this last quarter, where we have also seen an outperformance in China. A fourth quarter where we have grown both in operating profits and in net profits, even though we have included the impairment for our Russian assets in the quarter, which have represented almost EUR 20 million between EBITDA and amortizations, and which has lowered the profits for the quarter. If we talk about annual organic growth, more than 60%, which represents an outperformance of 10 points, in a market that has grown by almost 7, with a market share gain that is absolutely real. If we discontinue the effect of the pass-through, we are still beating the market. A complex environment with suppressed volumes and generalized inflation, where we're growing at double-digit figures in all lines of the P&L, exceed EUR 600 million in EBITDA for the first time, and have reached EUR 300 million in net profit, the highest in our history. Moving on to cash flow, EUR 100 million in operating cash flow that we've generated in the fourth quarter, very much in line with the previous quarters, with an EBITDA conversion ratio that has again exceeded 65% in the fourth quarter, and has meant consolidating the year with a conversion ratio of 66%, completely in alignment with the most important of our strategic commitments. The quarterly CapEx is approximately EUR 50 million, in line with the average quarterly investment for the year. Annual CapEx amounted to EUR 205 million, shared in a very similar way between investment in maintenance and in growth, with a bias towards emerging markets with a great dynamic and growth potential, so that between India, Mexico and Brazil, they make up more than 50% of our investment. You can also see here in the CapEx, we continue in line with our commitment of approximately 5% CapEx over sales, and about EUR 1 million in investment during the 5-year strategic plan. Another outstanding element in the flow this quarter has been the working capital, those EUR 90 million have been recovered. A fourth quarter, which is usually a net generating quarter, and where the whole organization has made a major effort to control it. In summary, we have to highlight the more than EUR 400 million in operating cash generated during this 2022. Cash flow that has enabled us to return to leverage ratios less than 2 times net debt EBITDA, while we have invested over EUR 200 million in generating value for our shareholder through dividends, share buybacks, and the purchasing of minority stakes. A cash generation capability that supports our strong organic growth greater than the market in a recurrent and sustainable way. Which allows us to grow with strategic acquisitions, such as the acquisition of Iber-Oleff Brasil, which we announced this month of February. We leave aside 2022 to talk about the future. If we talk about the future, we're talking about uncertainties that still persist in the sector and which are clearly reflected in the spread in the 2023 forecast from the various consultants and players. The main keys for this divergence in estimates are, on the one hand, the estimated impact of the chip shortage, and on the other, how the European and Chinese markets are going to evolve. We could say that the estimates from IHS for 2023 are in the middle to top part of the range. Let's talk a little bit about the various markets in 2023, and what the future drivers are for those markets. In Europe, a 5% growth is forecast, up to 16.1 million vehicles, a market that has been the most affected by the bottlenecks, which is at minimum supply levels, which still has waiting demand, although it could feel the impact of the macroeconomic situation. A mature market where the growth driver that will probably have the greatest influence in the future will be that of replacing very old cars over 12 years old on average, and under a great deal of pressure from the new emission regulations that have been implemented. Even so, Europe is the only market that is not expected to recover pre-COVID levels in the next 5 years. North America, we're talking about a growth forecast of 5%, up to 15.1 million vehicles, with better prospects than in Europe, with inventory levels that are still very low at levels of approximately 30 days, with an especially powerful incentive program, IRA, that came into effect at the beginning of 2023. This to add cars that are as old as in Europe and an economy with full employment and without Europe's energy problems. With all this, it is expected that North America will recover pre-COVID levels between 2024 and 2025. Brazil with a growth forecast of 5%, up to 2.3 million vehicles. Apart from the inventories being at very low levels, a little more than 20 days, and that the bottlenecks have also affected this market, the focus is on Structural drivers for country growth with waiting demand, with a motor car ratio that's still very low, barely 20%, and with a car stock that is already getting older, around 11 years, that requires replacement. Very good prospects for a market that expects to recover pre-COVID levels in 2026, and where an annual compound growth rate of around 7% is expected for the next five years. China, with a growth forecast of 1% to 27 million vehicles, although in the medium term, in the horizon of the next five years, a compound annual growth rate of more than 3% is expected. Several drivers explain this potential, including the convergence of the available income in many secondary cities that are getting closer towards the country average, a very low car ownership ratio, around 20%, and the strong competition between OEMs that is contributing to reducing the price of vehicles to make them more affordable, so that a larger percentage of the population will be able to buy them. We end the market summary with India, one of the markets with the strongest future potential. A growth forecast of 7% for 2023, up to almost 5.5 million vehicles. A market that is showing a clear preference for private vehicles after the pandemic. A market with an extremely low car ownership rate, 3%, with a rural economy in mid-expansion and with an enormous middle class that is young and with growing purchasing power. A market that's very competitive from the point of view of the production cost, that is concentrating more and more investments from different OEMs, attracted both by the demand of the internal market and because of the country's export capabilities. India is also one of the main motorbike markets in the world. The growth forecast for the coming years for this segment and other segments like tractors and freight vehicles represent high single or double-digit figures. All these sectors are sectors that we have a significant exposure to from our plants in India. An overall growth forecast for 2023 of 3% up to 85 million vehicles according to IHS. That would still be 4% below the pre-COVID volumes, and that would be recovered in the year 2025. The goal of this review was really to make it clear that in general, all the geographies in each and every one, there are important drivers for the future, mid and long-term drivers, that the growth of the sector does not end with merely satisfying waiting demand in the short term or with building up inventories. It's a future where we envisage that the weight of each market is going to be very different to its current weight with the emerging markets taking on increasing protagonism. We come to the end of the call. The only thing left to say is that we look to the future with optimism. We are perfectly aware that there are still many uncertainties in the sector that are completely outside our control. These recent years have confirmed the resiliency of our business model in adverse scenarios. We confirm once again our guidance for 2025, all our strategic commitments for 2025. I'd like to say that our view and commitment to the future doesn't just stick to the financial magnitudes. As you know, one of the key pillars in our strategy is also ESG. The climate emergency has taken us to reinforce our commitment with climate neutrality. That's why in December 2022, the board of directors of CIE took another step in the environmental strategy by approving an additional roadmap that establishes new medium and long-term goals according to science-based goals and the Paris Accord. We're talking about reaching net-zero emissions of greenhouse gases no later than 2050. We're talking about contributing to limiting global warming to 1.5 degrees above the pre-industrial levels through the reduction in our greenhouse gas emissions. Establishing science-based objectives in a term of 24 months approved by SBTi for the medium and long term. Develop the supply chain Race to Zero project to involve our supply chain, supporting and mentoring all those suppliers that find difficulties in deploying ESG policies. These are our new environmental commitments. We want to end the call with these inspiring commitments that are so much for the future. Before moving on to our questions with our CEO, Jesús Mari Herrera, who's with us today, we'd like to take up just one more minute to show you in images, in a video, how we've lived this year, 2022, at CIE. We have a lot of questions. In order not to repeat them, let's group them together to make it more efficient for everyone. Starting with the first topic, we're asked about the 14.9% margin in the fourth quarter. Why is it low? Also, there's a very different evolution if we look at it by geographies. For example, Europe is much worse, Asia is much better. Could you explain what's behind this? Very good. Good afternoon, everyone. I'm Jesús Mari Herrera. Those that know us know that in a year, we always give the recurrent EBITDA percentage. It's true that in the fourth quarter, we decided to impair all the assets we had in Russia, that's why the EBITDA has gone down below 15, below EUR 11 million and EUR 6 million in amortization. That would put us at the same EBITDA as for the rest of the year. Every year, we have non-recurrent revenue and expenses. The account we show you is the recurrent account, that's why the 16.5% EBITDA we ended the year with is what we've opened the new year, 2023, with. Obviously, we will have to improve it with all the improvements that have been planned for this year. They ask, how is the business in Russia? How is the Russia plant? Are you working or not? No, no. The plant is completely shut down. We have about 40 people that are being temporarily laid off in Russia, and we have about $150,000 in dividends. We will gradually liquidate the entire Russian operation. What is the impact of the pass-through in the annual sales growth in the organic plus 16%? How much is actual market share gain and also the impact on margins? Well, that's 16, 17, more or less. 12 is purely organic, and 5 points is the pass-through. If we count the pass-through for last year and this year, we are more or less at 1.1%-1.2% impairment in margins because of the pass-through issue. Now we are asked about the evolution in working capital. Very favorable in the fourth quarter when factoring has been reduced during this fourth quarter. Well, you know that it's always in the last quarter where we make a greater effort to improve working capital. I think that the good news is that our whole Asian team has pulled its socks up in improving working capital. Working capital wasn't part of their management objectives. Nowadays, they've made a significant effort that has helped improve working capital. This improvement in working capital is obviously going to be recurrent, and we'll continue to work on it as one of the most important aspects in our management. To supplement that, perhaps, this is Mari, we've had a question regarding the fact whether it goes up or down. The factoring in 2021 was around 9% over sales. We've ended the year at 8-point-something% over sales. There may be some peaks and troughs, but not only have we reduced it in proportion, and we're more or less comfortable in that range. There may be some peaks, but we're comfortable in that range, more or less, in that percentage over sales. That's important. Always maintaining the same percentage, more or less, means that the cash flow generation is real. Please bear that in mind. Moving on to another subject, I ask about the status of the sales process for the German forges. Related to this, the big margins in this division are surprising compared to the recent past with EUR 20 million EBITDA in the last year. Well, starting with the second question, the margins, we thought that our customers, our truck customers, would suffer a major drop, and that's why recently, we have provisioned for a possible restructuring. What has the surprise been? We've renewed contracts with customers that guarantee the current volumes for the coming years. At the end of the year, we decided that provision doesn't make sense, and we turned the provision around, and that's the reason for those margins that obviously are not recurrent. The recurrent margins we've always provided is 5%, 6%, 7% EBITDA. What was the other question? The process. How is the process going? Yeah, sorry. Well, the I would say that it's going fairly well, fairly quickly, and I hope that I'll be able to give you positive news soon. I think that we're going to meet the plan with everything we've said. The goal to discontinue the activity, to sell it, I hope again that there will be a happy end soon. We move on to talking about the future. What's the view about 2023? Do we believe the IHS estimate of plus 3%, what can we expect from CIE regarding our performance, margin expansions in view of how costs are evolving? Well, it's true that determining what's going to happen during the whole year, it's difficult. IHS does talk about 3%. We've had the releases from the first four months, they're more or less in line with those figures. We know the reality for January and the releases up to April, they pointed that 3%. The margins, well, we have strategic goals up to 2025, you know that we're on a path of growth in margins, we're working on it. Without a doubt, you'll see better margins in 2023 than 2022, and better margins in 2024 than 2023, and better margins in 2025 than in 2024. We ask, can we give an update on the chip situation, the IHS estimate of +3%. Bottlenecks that have been less than in 2021, obviously, it couldn't be worse. It's estimated that the impact in 2022 has been around EUR 3 million, versus the EUR 10 million impact in 2021, and it's like a never-ending story. 2022 was normalized, and then it wasn't, and now it seems that 2023 isn't going to be 100% normalized either regarding the chips. This morning, Auto Forecast, one of the market consultants, made a forecast and they said that they thought that in 2023, there could be over... an impact of over EUR 2 million again because of the semiconductors. They referred in particular to the North American and the European markets as the main markets to feel the impact. I think that in several of the OEM calls this season, we've heard about a positive trend to improve, but it doesn't seem that 2023 is going to be the year for 100% recovery. It's going to be a year with new automotive chip production capacity, and we hope that by 2024, at last, we'll be able to stop talking about semiconductors. Related to the CIE expectations, we've seen a low performance in China in the previous quarter. What's the strategy with Chinese OEMs in the future? The threat of China in Europe, have you seen anything different there? We've said that in China-Western customers that have JVs with China are losing market share. They're most of our customers. It's true that the Chinese customers are producing cars much more cheaply than Western cars, but also with worse quality. It's true that they're gaining market share. You know that in China, to be highly profitable like us, we have to take star products, and that kind of Chinese local customer doesn't use this kind of star products. In spite of this, we're trying to adapt and grow in market share with them. We're trying to make components that are less demanding for Western customers. This is what the Chinese market calls for, and this is what we're working on, especially in the roof division. In Europe, it's obviously that the Chinese OEMs can produce in Europe. Chinese producers are not going to come to Europe. They're going to have to work with the main European component manufacturers that know how to work in this continent. For us, it will be wonderful for them to come because as I said, they will have to resort to us for the assembly of their cars. You said that your expectation was to grow in all lines in 2023. There's a question about the net profit and the debt strategy, financial costs, and fixed versus variable, the impact it could have on 2023. Without a doubt, to make it clear, in 2023, we're not concerned about sales because the market might grow 2%, 3% or whatever, we'll grow significantly more. We're not concerned about it. I think the percentages, because we're going to grow, it's obvious that there is a financial cost element that's very important and that affects all companies. As a strategy, we have more than 50% at a fixed cost, so that doesn't affect us. Only the variable cost affects us. We have between 150, 180 basis points more than in 2022. In spite of this, you can be sure that our net profit will continue to grow. It's an important item, something that we don't have control over. It's impossible to have control over it, but it's not going to hurt profits. Profits are also going to grow this year. About M&A and view of the recent purchasing of Iber-Oleff. There are many companies that are in a difficult situation. The valuation multiples are dropping. Is this purchasing reinitiation of the M&A strategy? What's the debt criteria you operate with? We've never stopped doing M&A. You know that it's an extremely important part of our management and our strategy. To give you an idea, we analyze up to 200 operations per year. This doesn't mean that we don't carry out any operations in a certain year or 2 or 3 operations in another year. To explain the differences in the various geographic areas, starting with Europe, for example. Those that are sick are terminally ill, let's say. In companies that are terminally ill, the problem is in the hands of the customer. It's not my problem. If the customer asks us to buy a company, there will be. We'll always help the customer, and obviously, we'll guarantee that that company integration benefits us. Brazil, for example, as another important place for growth with us, we have quite a lot of companies that are coming to us because they want to get out of the market because they never made money in Brazil and because they know that CIE, after being in the country for years, has prestige, let's say. Prestige as a highly profitable company in the country and that knows how to manage things in the country. In India, without a doubt, we said it earlier, it's the market for the future. We are very well-positioned. We have full confidence in the future. You can imagine that with the current price of the share, we have to think about continuing to integrate good companies that may be a little bit expensive. Again, considering the share price we have today, this could be a way to introduce new technologies such as plastics or getting into new geographic areas in India we're not currently in, and also bring in strategic customers where we're not strongly positioned. Another strategy could be geographic expansion. Why not go to other markets that we're still not in? We have several things on the table, and we're working on it. Finally, the other M&A decision would be a strategic decision. What products and what technologies we need to continue to develop and think about for the cars of the future. These are the five open windows for our inorganic growth, which, as I said at the beginning, is the base, together with organic growth, to guarantee our future. In relation to India, there's a question as to whether we have a roadmap or a plan for the minority stakeholdings there, and would we buy at these prices? A double question. I think I answered it earlier. More than buying at these prices, I think we would integrate companies in exchange for a little piece of the paper, and I think everybody can understand what I'm saying. I think that it's the time to make use of the price and not to reduce the free flow. Increase it. Something else related to shareholder payouts. We mentioned the buybacks this morning. What's the reason? Do you plan to reactivate them? What's the rationale? It all depends on the share price. We have acquired the shares at around EUR 20. Today, we're at EUR 27, EUR 28. We ought to be at EUR 33, but anyway, we're at EUR 27, EUR 28. We believe that it isn't the time to continue to buy because of the free flow. We reduced capital by 5% recently, and now we're reducing capital again by 2-point-something%. We can't take away more free flow. That's the reason why we made the decision on the board of reducing the capital for all of our own shares we had acquired at that price of 20, twenty-some. It's a matter of the profitability of the purchase, which is about 20% for our shareholders. The last question we have is, what keeps us awake at night? I was going to say the children, but mine have grown up, so I can't say that. No, CIE is very solid. You've known us for many years. Year after year, we're beating records. We've been generating cash year after year. We're the biggest cash generator in the automotive component world, so nothing keeps us from sleeping at night. The biggest problem we could have are variables that are out of our control. The rest of the things we control, the 114 companies are perfectly aligned. As I always say, they all help and contribute to this sustainable and profitable growth that we're having quarter after quarter and year after year. There's nothing right now that keeps us awake. Well, perfect. That was the last question. Well, thank you all very much. Thanks from me. It's been a pleasure to be able to join you and share this time and answer any queries you might have had. Thank you all very much. You know that we're at your disposal if there's anything left to be asked. Good luck with the results presentation season.