Hello, and welcome to the Plastic Omnium 2023 third quarter revenue call. My name is Laura, and I will be your coordinator for today's event. Please note this call is being recorded, and for the duration of the call, your lines will be on listen-only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator. Today, we have Laurent Favre, Chief Executive Officer, and Kathleen Wantz-O’Rourke, Chief Financial Officer, as our presenters. I will now hand you over to your host, Laurent Favre, to begin today's conference. Thank you. Yeah. Good morning, everybody, and a very warm welcome from my side. Laurent speaking. I'm here together with Kathleen and Stephane as well, and to comment to you to present you our Q3 revenue and the perspective for the rest of the year. I hope you can see the slides on your screen. We are on page 2, and we are talking now about the executive summary. All in all, we are very happy to confirm a solid growth in revenue in the third quarter as well, compared to the market, compared to last year. And all in all, the group did record 26.5% cumulative growth since the beginning of the year, outperforming the market by 6.4 points. We have a very robust order intake. It was already a highlight of the first semester. It is, again, a highlight for the third quarter, and that will be a highlight for the complete year, and we will come back to that later on. We are fully on track to deliver our strategy based on very strong historical activities, gaining market share, consolidating the markets and delivering a high level of profitability and free cash flow, but also new businesses, again, confirming the relevance of our technological choices. The group continues to invest in all the businesses, again, to address this high level of order intakes, and we are convinced that we are fully in line to benefit from the market transformation, which is accelerating. Concerning the environment, since some weeks, the environment did change in some aspects. We have been facing, with our traditional OEMs, the flooding in Slovenia impacting our exterior business. We have the strike in the U.S. which did start middle of September, which is intensifying since some weeks and also in some days, impacting as well our fuel tank business. And we do see some volumes going down or being far away from the expectation, especially for BEV for traditional OEMs, and we'll come back to that in a couple of minutes to give you a bit more, a bit more information on that. And for sure, inflation and interest rate remains at a very high level, and we do expect this level of inflation interest rate to remain for the coming quarters. Therefore, we have decided, because we always want to be fully transparent with you, to adjust our perspective for the full year regarding the operating margin and the free cash flow. But for sure, also to confirm, our growth and the outperformance of the market, we are still targeting for 2023. I move to the next slide. Talking about the market in the third quarter, you can see on the left part of the slide, what did happen in the first semester. The first semester was very dynamic in terms of market growth. It was mainly due to the fact that last year, in the first semester, the level of production was pretty low due to diverse topics like the war in Ukraine. Third quarter in, the growth of 3.8%. Inflation is remaining at a very high level, as you, as you all know, and I was commenting before the slowdowns of some, some OEMs. That is mainly for BEV. And what we do see today for BEV, for the traditional OEMs, premium and mass markets, is that the volumes are 30%-50% below the expectations, and that we don't see a positive development in the months to come or even a slowing down in the months to come. We had to face as well frequent stop & go coming from the flooding in Slovenia, but also other supply chain topics. And the UAW strike, which didn't impact us massively or relevantly in September, is accelerating. In October, it was a much bigger impact on us. And since some days, it is an even higher impact, and I'm sure that we will talk about that later on. High interest rates, like for everybody, they are impacting financial costs as well, but that is a topic which is concerning the complete industry. Now, when we talk about our Q3 revenue, not the market, but how PO is performing in this environment. Again, the numbers on the left side are concerning our sales in the first semester. You know that in the first semester, we had 35% of growth, 20% organic growth in the first semester. That means, outperforming massively the market. In Q3, we have a growth of 11.5% with adverse effect, a FX effect, negative EUR 124 million, which is due to currency devaluation. You can see that on the screen. And the positive impact of the acquisition, mainly the Varroc Lighting Systems, because we, we closed the Varroc Lighting Systems acquisition last year in October, the sixth of October, and that is now fully in our books, since the first of October. Organic growth of 6.5%, those concerning industries and modules. Well, we have to, we have to see that modules is, is, is growing or is outperforming the market more than industry. I start with modules with very solid activity in Germany, but also we are very happy, very pleased, to announce that we have been able to produce the first modules in Austin, Texas, for a very important and successful BEV customer. And, I'm sure you know who we are talking about. That is a fantastic performance from the team because we got the award at the beginning of the year. That means when we did start the year, we didn't have the award, we have been able to put in place investment, factory, and now we are producing the modules, and it will help us to continue to grow in this business, but also to diversify in terms of geographies and in terms of customer portfolio. Regarding industries, a very strong momentum in term of start of production, because we had 11 start of production in our exterior business, much more than what we had last year. That is the effect of the strong order book as well in the IES business, bumper and tailgate business, and being the leader in the global market and reinforcing this leadership position. Clean Energy Systems of fuel tank business is also having a very strong momentum in order intake with the consolidation of the market, and we will talk about that in a couple of slides. But also in revenues because is outperforming its addressable market. That means the market with an engine inside. That was about the sales of PO in the third quarter. On the next slide, you do see that by region. We have put the performance of PO compared to the market for the quarter and for the year to date as well, 'cause it's always difficult to evaluate an outperformance only based on the quarter, depending on the number of launches you had the previous year or this year. It's not always relevant. If we start with Europe, which is 48% of our sales, you may remember that we want to reduce our dependency on Europe, and we are putting orders mainly outside of Europe to diversify in terms of geography. And what I said before, with the module in the US, will go in this direction. In Europe, we have been able to outperform the market again in Q3, but also in year-to-date, but about 5 points. In the US, we are pretty in line with the market in Q3 and also in year-to-date. It depends on the customer portfolio we have. We are suffering in the US with one launch not coming at the expected level from a traditional OEM for a BEV, where the volumes are much lower than expected, where we have been investing, and where the volumes are, again, as mentioned, far below the expectation. Hopefully, it will come in the coming months. In China, we had in Q3 negative outperformance of 16.8 points. There were some specific topics last year in Q3 for YFPO being very high. If we have a look on the market, China, year to date, we are more or less in line with the market. YFPO, exterior business, leading position on the market with 25% market share in the market, is outperforming the market, is continue to diversify to purely Chinese electric players, like, like NIO, and also with the Tesla business we have in China. While CES is for sure suffering in China because the electrification is accelerating and CES is having for sure a reduction in sales compared to the previous years, and that does impact as well the outperformance of PO in the market. The module business in China is mainly for Mercedes, and Mercedes is, as you know, not outperforming the market in China. But all in all, we are in line with the market in China in year to date. Asia, strong outperformance in the quarter, strong outperformance in year to date, mainly driven by modules in Thailand or in Malaysia, but also fuel tank business. And we do see that the fuel tank business is still developing in many markets, in many countries outside of China, and is pushing our outperformance in the rest of Asia, again, outside of China. Now, if we go to some business highlights in Q3, we like to talk about launches. We had 50 launches because the launches do represent the growth of tomorrow and the effect of the stronger book. We had 50 launches in this quarter, which is much more than what we had last year at the same period with 29. There are some examples here, six out of 50, which are representative about the mix of customers we are addressing, but also the diversification in terms of technology and in terms of geography. Again, our target is to be more diversified with our customers, but also with our geographies. Some examples I will comment for GM, Chevrolet Equinox EV, a pure EV vehicle being produced in Mexico for GM, which has been launched in the third quarter. BMW iX1, also pure EV in China, being produced in Shenyang from BMW, where we do produce and deliver all the exterior parts. The cockpit modules I was mentioning before, Austin, Texas, we did start the production in the previous weeks. We will accelerate in the coming months. It will be about cockpits. It will be about front-end module for two vehicles, the most selling cars in the world, and also a new pickup being launched in the coming weeks. Hybrids and hybrid as well, a very important business for us. You see some premium OEMs. You know that we like to be exposed to premium OEMs because in term of volumes, they are stable, and they are not suffering much more of the crisis than the mass market. Audi, with the new A6, A7, we are the ones delivering the bumpers in the front and the rear. The 5 Series, the new one of BMW for the fuel system, which is also important for our fuel system business in Europe. You may have seen that we announced some weeks ago that we will close the factory of Rottenburg in Germany for the fuel system business, and we will produce this fuel system for the 5 Series in Lozorno, in Slovakia. It's also a matter of consolidation of the market and producing where it makes sense in term of cost, and the Front-End Module for this Mercedes being produced in Mexico. Therefore, some examples of the strong momentum in launches, and it will continue and accelerate in the coming quarters. On the next slide, it's about the Order Intake. That was what we—I commented before, it was about the launches, now the order intake. You see without numbers, because we don't like to disclose the numbers, the order intake in 2020, 2021, 2022 for the full year. Last year, and in 2021, we had an order intake being 30%-40% above the sales level. And this year, we believe that we will be at two times the yearly revenue for the order intake. It will be a record. It will be around EUR 20 billion of sales, which is fantastic for PO, which is demonstrating again that we have the right strategy. We are gaining order in all the segments, in all the divisions, consolidating the business in the CES ICE activity, which is very important for us, and which is proving that we have the right strategy. Gaining market share as well in the exterior part business, developing module outside of Europe. I was mentioning the U.S. before, but also having a very strong momentum in hydrogen. I will come back to that in the next slide. Electrification, which is a new product line of PO, but also in lighting. Lighting, you know, that we had an agenda being focused in Q1, Q2 on performance, on protecting the customers, on reducing the cost. That was done, and now we do see the benefit of that, meaning that the customers they do trust us. We had a very strong order intake in Q3. It will continue in Q4. In year to date, we are at, one billion or more than EUR 1 billion order intake, and we are very happy to announce that we won major orders for American, European OEMs with production in North America, meaning in Mexico, for us, in Europe, in North Africa. I'd like to say that, that the competitiveness we have in, in lighting is, is also due to the fact that we have only best cost countries in our, in our portfolio, both for production but also for R&D activities, and that is, the confirmation of that, is the trust of the customer and these others. We have also four new orders on body shell. That means that is the integration of lighting in exterior parts, and that does demonstrate, again, the potential we have by using the synergies between our new lighting division and historical to continue to grow this business. Therefore, in lighting, we are fully on track to achieve our EUR 1.5 billion in 2027, and we are very happy about the operational performance of the lighting and the capacity the team had to adapt the structure to the new market condition. On the next one, it's about hydrogen as well. Here, a very strong momentum, EUR 4 billion of order intake. That is 95% for commercial vehicle and heavy-duty mobility. Therefore, for us, great opportunity to diversify the market we are addressing as well, to be less dependent on passenger cars and to develop, as mentioned before, with other customers. Stronger order intake means as well that we have to put in place some investment everywhere in the world. We like that also very much, because we will have a very balanced geography and very balanced customer portfolio as well, meaning we are today building up capacity and factories in France, close to Compiègne, with a mega factory, a giga factory, I don't know how to name it, which will be the biggest in Europe for hydrogen storage. We are also doing the same in Michigan, in the U.S., for a major American OEM, with the start of production in 2027. We are finalizing the new factory in Korea for Hyundai, a smaller one, which will start in 2025. We are starting also to build up capacity in China with our joint venture, Yanfeng Plastic Omnium, with the start of production in 2026. We have to extend as well the capacity we are building in place in Belgium, in Herentals, because we have some ramp-ups in the coming years. Therefore, very enthusiastic plan, ambition, with a lot of ambition to be the number one in hydrogen. From the other side, we do that with a staggered approach in terms of investment, meaning that the concept of our factories are very flexible. It's a kind of module in each factory, meaning that we just invest for the capacity which is really needed by our customers, and therefore, we have a strong interaction with our customers to make sure that we don't overinvest, depending on how they do see the ramp up of this new technology. We like to benefit as well from local incentives. We have been already mentioning about some numbers, like in France, of EUR 75 million. All in all, we have identified EUR 200 million opportunities in order to support us to finance these very exciting goals. On the next slide, also something we like very much and very strong highlight in the third quarter, and being fully in line with our ambition to be carbon neutral in 2025, in Scope 1 and 2, and also to reduce our Scope 3 by 30% in 2030. We are fully in line with those targets, I would say more advanced even than what we thought. And we did celebrate some weeks ago with EDF, a strong partner of PO, 20-year power purchase agreement with the EDF Renouvelables to have green energy to a very competitive cost. That means it will cover 50% of our needs in France, of electricity. We, meaning that fourteen... And on top of that, 14 Plastic Omnium sites in France are going to be powered by renewable energy with five new photovoltaic power plants plans. It's good for the planet, it's good for our CO2 ambition. It's good as well to have access to electricity at very competitive prices. That means it combines CO2 targets, CSR, but also financial targets we have. Everything we are doing is always confirmed by EcoVadis. Again, platinum in the second time in a row, and therefore, we are in the top 1% of the companies assessed by EcoVadis, which is, again, a strong performance of the team, a stronger commitment of the company. On the next slide, perspective and and conclusion. You can see, and I hope you can hear as well, that we are very, very, very enthusiastic about the fact that our strategy is the right one to benefit from the market transformation, the huge market transformation in middle and long term. It is proven by the stronger order intake we have, meaning it will be a record year again, and that is the feedback from the market, which is always the most important. The customers, they want to work with us in all activities, in the rest of historical activities, which are very important for us because it's about profitability and cash generation. I'm talking about IES, about CES, ICE and about HBPO, having a stronger book and delivering a strong performance in the first nine months of the year. Which are giving us the opportunity to develop the three new activities of PO, which are needed to diversify and to benefit from the market transformation. Lighting, with a strong momentum in order intake, I was mentioning before. Electrification as well, with a very strong order intake this year, but also our hydrogen, as I was talking about before. The context is, for sure very challenging. It's, I would say, more challenging than what we thought at the end of the first semester. There were some events in September, October, and also probably in November, impacting the market we are in. I was mentioning before, what did happen in Slovenia, but what is more concerning for us, these are the volumes for some EV platform for traditional OEMs. I was mentioning before, the UAW strike, which was having almost no impact for us in September, but with a potential impact much higher in October, November, because now we are talking about much higher numbers in terms of sales. Our factories in the U.S., but also in Mexico, are impacted by that, mainly for the fuel tank business. And we know that the fuel tank business in those platforms is a very important one in terms of operating margin and free cash flow generation. Inflation is still impacting our business, like for everybody. Interest rates as well, impacting the business, the financial costs, and therefore, the free cash flow. We want to continue to invest, because we are convinced that we are on the right path to continue to outperform the market on long term, and again, to benefit from this, market transformation. That is what we do reflect in our new 2023, objectives. With all the transparency you deserve, and you always want to give to you, that means we will outperform the market in terms of sales. We adjust slightly the operating margin and free cash flow expectation for the year. Again, not reflecting a worse performance of PO, but just a different market environment I was talking about. And we don't want to compromise on the future of the company. That means we keep investing in, new technology, in new geographies to make us fit for the future. We will be able to continue to do it by deleveraging the company, which is for sure a target for all of us. That is basically the conclusion. Growth in the third quarter, growth in the year to date. The adjusted outlook I was mentioning before, a strong trust from our customers. Therefore, we are able to accelerate our strategy for the coming years, and we keep a very solid and sound financial structure. That means our debt, our liquidity, our capacity to deleverage, and to continue to be able to manage both the short term, meaning to adapt to the market condition, but also to prepare the long term, meaning to invest for the future growth of the company. That was about the Q3 and year to date events or situation at PO, but also the perspective for the rest of the year. I'm sure that you have plenty of questions, and I will be delighted to answer your questions with Kathleen and Stephane. Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star one on your telephone keypad. Thank you. We'll now take our first question from Thomas Besson at Kepler Cheuvreux. Your line is open. Please go ahead. Thank you very much. It's Thomas with Kepler Cheuvreux. I have a few questions, please. Firstly, could you just tell us what you have assumed for the strike that seems to be now close to ending? So, help us bridge basically the previous guidance. I think consensus was more like at EUR 420-EUR 430 versus now EUR 380. How much of the EUR 40 million-EUR 50 million reduction comes from the strike in your assumption? Please, that's the first question. Second question, have you changed your CapEx assumption for 2023, or is the new free cash flow guidance mostly coming from a reduction in EBITDA? Thirdly, could you help us understanding whether it's entirely your industry business which is going to take a hit, or whether modules will also be impacted? I would assume the first answer. And lastly, could you remind us how much exposure you have within your BEV business to what- A lot of people call legacy automakers, so notably, Volkswagen, Mercedes, Renault or Stellantis combined. How much of your BEV business is it, please? Thank you very much. And I will start, Thomas, with the first, and Stephane and Kathleen are working on the next question. Regarding the strike, hopefully it will end pretty soon, but you may have noticed that in the previous days, they have extended that to the Texas factory of GM, which is impacting us now in Mexico. That means in two factories in Mexico for the CES, ICE business. In September, that is what we told you also, in September, the effect of the strike on our sales was below EUR 10 million. That means it was not relevant. With the current situation, and if the strike would continue until the end of the year, we are talking about around EUR 60 million of turnover potentially impacted. Another question is, what is your assumption for the guidance? You have noticed that for the guidance, we say between EUR 370 and EUR 390. It's because we don't know what will happen with the strike. We just do see that the strike is intensifying, and therefore, we believe it could last in November, and hopefully it will stop somewhere in November. But that is something we don't know, and therefore, we have decided to go for not the fixed number in terms of guidance, but a kind of spread. But again, the strike now is impacting us in Michigan, but also in Mexico, and that is mainly our fuel tank business, a bit the lighting as well. But the most important hit for us is the fuel tank business. Regarding the CapEx, we will have a higher CapEx this year than what we were expecting. Which is, in a way, good, because it is what we want to do in order to develop the company. We will be able to be below 5% of our sales this year, even if it's higher than what we had in the first half. There are many reasons for that. One reason is, I was mentioning before that, we have launched a new module factory. It was in October. It was not previously in our expectation for the year, because we got the award in January from this BEV player in Austin. Therefore, there are investments we have been doing the last month in order to launch this factory. We have also some investments which are related to new orders we got for the consolidation of the market in the CES's business. Not investment in terms of industrial capacity, but project investment as well, since we need to develop this kind of product. And also investment, but investment we were targeting for hydrogen and electrification. Therefore, it's a mix of higher investment for order intake. We are very happy to serve module in the U.S. and CES, ICE for CES, ICE it's not industrial investment. We have capacity in place. It's much more about project investment, and also some investment which were already scheduled to prepare the growth of the company for hydrogen. But all in all, it will be at around 5% of our sales this year, slightly below 5% of our sales. In the coming years, it will be always around the 5% of our sales, as we said. Regarding your question, module or industry, which is suffering the most, I would say depends, but at the end of the day, module is suffering more today than industry. It's suffering more from the stop & go, because when you have a dedicated factory and the customers is stopping, then it's really difficult to flex. It's not the case for some factories we have in industry because they are serving normally many customers, and they can flex much better. In module, it's much more different, and module is pretty exposed to BEV customers, especially German ones, like Mercedes, like Porsche as well. The volumes are much lower than expected. Module is exposed as well to new vehicles, which were supposed to be launched 2 years ago from Audi and Porsche, and where the launches have been postponed. I don't want to mention exactly the platforms, but I think you can find that. Therefore, module is today suffering more in operating margin and in free cash flow than the traditional industry business. BEV exposure? BEV exposure for the traditional OEMs, that was the question of Thomas. So we're exposed today 19% of our sales to BEVs, Thomas. If you can recall, about two years ago, it was roughly about 9%, so we've considerably increased our exposure to BEVs. For traditional OEMs, roughly 15%, and the 4 percentage points difference can be attributed 50/50 to Chinese and American BEV manufacturers. For the traditional OEMs, I think it's obvious, and everybody knows that, that the volumes are 30%-50% below requested volumes and the capacity which was put in place. Which is for sure, for some factories of PO, a strong hit, and intense discussion with the, with the customers. But that is a trend we are seeing today. And I believe it's a trend which will continue as well for the market, in the coming months. And basically, that is in line with the announcement of many customers you have seen in the recent weeks, and months, saying that the BEV market is slowing down, and that the volumes are not in line with the, with the, with the expectation. Therefore, we continue to like to be in BEV, because on long term, for sure, it will be a growing market. But we are very cautious now when we invest in new capacities for traditional OEMs. We discount much more than what we did discount before. Before we did discount 20%, now we are discounting more in the area of 50%, because the experience is showing that for any reason, they are not performing as they were expected. But that is something which is, I would say, not new, but which is intensifying since some weeks. And we had some customers stopping the production for some days, because they were not selling the cars. That is something we didn't see in the first half of the year. Clear. Thank you. Thank you. We'll now move on to our next question from Akshat Kaka at JP Morgan. Your line is open, please go ahead. Morning. Morning, Laurent. Morning, Kathleen, Akshat from JP Morgan. 3 from my side as well, please. The first one, sorry to come back to operating profit. Can you just go back to all the drivers behind the EUR 50 million-EUR 60 million downgrade on operating profit? I know you have spoken about a few elements. You have mentioned UAW impacting sales by EUR 16 million for the full year. But what are the other elements that have incrementally surprised you the most? Because if you take a step back, at the beginning of the year, you were talking about 3% production growth, and overall, we have seen much stronger production recovery in your key markets, Europe, North America, and China. So some more clarity on that topic would be very helpful, please. The second one is on the lighting business. When we think about the second half, I know this is a revenue call, but when you think about the second half, do you still expect to hit break even in the second half of the year, as you communicated with your first half results? And the last question is on your medium-term targets, 2025 ambitions that you laid out early on in the year. Do you still expect operating profit to grow by a 15% CAGR between 2022 and 2025? And do you still aim to hit your free cash flow target of 3%-4% of sales, and we should just view today's announcement as a short-term hiccup, or do you expect to revisit those 2025 ambitions as well? Thank you. I mean, thank you for your question, Akshat. First of all, the operating margin, you say deterioration of 50-60. No, our guidance was above 400. The new one is 370-390. That means it's EUR 10 million-EUR 30 million or 11-31 million less than the previous guidance. So, please accept that our target is not your consensus. Our target is our guidance. Therefore, compared to the guidance, it is EUR 10 million-EUR 30 million less. It does reflect what I said before. That means a strike in the US. If you consider, I was mentioning that it is about EUR 60 million for the quarter in sales. That means, only for the month of October, it's about, it's more than EUR 20 million, EUR 25 million+ September. You can assume it's above EUR 30 million in terms of sales. When you stop completely factories for that, the effect is huge on the operating margin, on the free cash flow, because the working capital and so on and so on. I let you make the math, but, but EUR 35 million of sales we are losing. At the end of October, there is a very high impact on the operating margin and on the free cash flow, because it's not a slowing down of the activity, it's a stop, which is something you cannot anticipate and you cannot fix. The BEV production I was mentioning before, we had some customers stopping factories for one week or some days, in France, in Germany, in the U.S. I won't disclose the name of the customer. You can imagine, you can imagine which one. And again, here, it's not only about, the sales are going down, it's about, you have a factory, and you don't produce. Because we have some factories in France, in Germany, and in the U.S., which are mainly dedicated to those BEV platform. Therefore, I understand your point to say the market is globally pretty positive, and therefore we are having a strong growth. But we had some areas of the world where production is being completely stopped, and that is what is hitting us as well. The module business is struggling to adapt to this stop-and-goes and inflation. I was mentioning before that the module profitability is not at the level we want the module to be right now. And that is also impacting us more than the industry the industry business for module. And again, it's mainly due to the fact that we have some factories being dedicated to some customers not performing in those platforms, and also that the stop-and-goes in modules are much more difficult to absorb. But we have launched a very aggressive plan to recover in term of module. That was about the impact in operating margin. Therefore, it's not about the global volumes. The issues for us is much more about these pretty brutal stops or slowing down or strikes, which are impacting us, basically. The inflation is something which is impacting everybody. I believe negotiation with the customers are pretty tense. Some negotiations are lasting longer than what we thought. Well, I believe, upon in operating margin, may not have the impact we were expecting in free cash flow as well, because of the delay between the negotiation being closed and the money being paid as well, and that is also an impact for the free cash flow. The rest of the free cash flow is what I said before, that is, interest rate being higher than expected, higher than in the first semester as well. It's part of our life, we have to adapt to that. But there is a consequence on that and on the free cash flow as well. Something we like positively is that we are investing more. Therefore, operating margin is EUR 10 million-EUR 30 million less than what we did guide, which I believe is showing that we are able to adapt to a very unpredictable situation, especially the strike in the U.S. and some brutal slowing down in some BEV customers of PO. Regarding the middle-term perspective, I think we all have to be very cautious for the coming quarters and semesters, and we always want to be transparent with you. If we adjust our guidance today, it's just because also as we do see that as a potential trend as well, not the UAW for sure, but the BEV, the effect from the inflation on the volumes of cars being produced and being sold. Therefore, for us, it's a way also to manage the company, to say we have to adapt, we have to continue to work on our break-even point, because the market in 2024 probably won't grow, compared to 2023, but maybe we'll talk about that. Lighting. Lighting was fully on track to deliver the break-even in the second half of the year. But lighting is also impacted now by the strikes in the U.S., because we are delivering some customers in Michigan as well, and we are impacted in lighting as well. And lighting is also, you know, very strong in the BEV segment. We like that with Renault, with Volkswagen, with Škoda, and so on. And if the BEV is going down, the sales in lighting are going down. And we had, or we will have in the second half of the year, 10% less sales than in the first half of the year in lighting for those effects. And therefore, it will be difficult to break even the second semester. Not because of the performance, but because of the market and the exposure to some customers, which are impacting the company. We are continuing to work on the break-even point on lighting. We have been able to reduce the workforce by more than 15% since 1 year, which is huge, and we will continue with the target to reduce again the fixed cost by at least 10%, close to 20% in the coming months, because we know that next year on lighting, we will have a kind of drop in sales. That is something we have been talking about in the first semester, not because of the performance of the business, but just because of the heritage of the past, meaning a pretty weak order intake in the last 2 years before PO came, and meaning that we will have a certain drop in sales next year. We are okay with that, huh? We are adapting, we are working again on the fixed cost. And the feedback from the market, the order intake we are having, we're seeing more than EUR 1 billion. We may be close to EUR 2 billion this year, ensuring that we have the right technology and the customer trust, and therefore, for us, the lighting will be a nice story. Our target of middle single digits in 2025, we are still targeting for the end of 2025, for sure, depending on the volumes. And then I cannot predict how many BEV, Renault, Volkswagen, Škoda, and so on, will produce at the end of 2025. That is something we are depending on. But in terms of what we need to do to achieve it, performance, break-even point, synergy with the rest of the group, that we are fully on track on, with what we wanted to do. In lighting as well, we are consolidating our footprint. We have decided to close a factory in Brazil as well. We are also, I would say, optimizing our footprint to use the capacity we have with the less surface, I would say, to be more efficient. That is what the team is doing right now. I think these were our question? Thank you so much. Thank you, Akshat. Thank you. We'll now move on to our next question from Pierre-Yves at Stifel. Your line is open. Please go ahead. Yes, good morning, Pierre-Yves, Stifel. Good morning to everyone. Just two follow-ups on my side on the free cash flow in H2, and regarding the price recovery with OEM on the free cash flow for H2. And for the full year, does the new target for the full year first includes or excludes the proceeds from the real estate disposal in the first half? And therefore, could you elaborate a bit on what would be the trend of free cash flow in H2 given the new target? That would be the first one. The second one, just to clarify, you've been talking rather extensively about that, but the tougher negotiations with OEM regarding price compensations, does that mean that some compensations will not go through or will be eventually much lower than you initially contemplated? That's what you implied, Laurent, in your comments. Thank you. Yeah. I mean, for the inflation, it's how can I say that? It's always a tough discussion with our customers. With some of them, it is lasting, I would say, more than expected. And we don't want to compromise on the level of compensation. That's how we prefer to postpone the agreement. And postponing some agreements is having the consequences that some negotiation will be closed or should be closed until the end of the year, may not have the full impact in term of cash. Therefore, that is a topic we are facing. But again, for us, it's not only about short-term free cash flow optimization, it's about middle term the right inflation compensation. Therefore, we prefer to postpone by some weeks and months, instead of compromise on the level of the compensation. We don't have any issues with liquidity, with cash availability, and so on. We are covered, as you know, and therefore, there is no compromise on the level of what we are able to negotiate. It's not only for inflation, it's when a customer is stopping a factory for a complete week, we want also to find a way to get compensated as well. Therefore, today, we have negotiation with them for inflation, but also for volumes, which are basically impacting us more than the inflation today. The volumes are complete shutdown or 50% lower volumes for some best platforms. The impact is much higher than what we have in inflation. Inflation, all in all, we are more or less able to cover raw material, a big part of energy, a big part of freight. Labor is more difficult, but I think it was something we did anticipate. And again, the fight is ongoing with some customers and some negotiation may be closed in the next weeks, but with not the full free cash flow effect we wanted to have. And now the new topic I would say is about volumes and about the stop & go we have with some customers. For the second half, free cash flow, Pierre-Yves, as you can recall from H1, our operating free cash flow was at EUR 137 million, excluding the deleveraging impact of the sale of disposals. We're guiding on EUR 190 million-EUR 210 million, so that should give you some color on what we expect in the second half. Okay. Thank you. Thank you. In the second half, in the second half, again, we have in the free cash flow, I mean, the operating performance of the traditional business is fully in line with the expectation. We have a bit higher investment, I was mentioning before, because, because that is the consequence of our success on the market. And therefore, it's not a concern for us, it's just, it's just a consequence. And that is something we are dealing with. I would say we are, we are very happy to deal with the, with the investment we need to do to consolidate the ICE market, for example, for CES, because long term it makes a lot of sense. But also to launch a new factory in Austin, Texas, because it's a very, it's a very good module business, and it will, it will help us to, to increase the margin on module and the free cash flow generation as well. That is, that is that. 8.6 rate, but also lower sales in, in S2 compared to S1, then you have always an effect on free cash flow as well, in working capital as well. And, and that is, that is something which is, which is in the, in the free cash flow. And we're honest and transparent. We don't want to do stupid things as, as well, just to have a, to have a higher number, not reflecting the situation. Thank you. We'll now take our next question from Julio at BNP Paribas. Please go ahead. Hi. Thanks for taking my question. The first one, I just want to clarify, is your global light vehicle production assumption for the full year in line with S&P, so around 7.5%, and expecting the strikes to last until the end of November? Just want to understand what are the assumptions behind the guidance. Then the second one on China, what should we expect in terms of outperformance in Q4 and as we go into 2024? Is there any scope for the outperformance to improve, or should we expect continued weakness in the coming quarters? And then the last one, just on the weakness on BEV. I mean, I don't want to oversimplify this, but going forward, if we are consistently going to see worse volumes on the BEV front, shouldn't that just benefit your fuel tanks business, as long as production remains at elevated or healthy levels? Thank you. Okay. I just want... I was just talking with Kathleen and Stephane to make sure that I- we did understand the question properly. Regarding the S&P, I don't know that S&P is predicting UAW strike. Therefore, to be honest, we don't look at S&P for our forecast. We look at customer demand until the end of the year, the EDI, and we discount. We discount by 5%-10%, depending on the customer. We have an assumption for the strike, but again, it's not S&P. It's really the EDI. We are in November almost, and it's November, December EDI in the system. We discount. We believe that December may be pretty weak in terms of production, but some customers, they will manage their working capital. They will acknowledge as well that they may have a difficult start in 2024, and therefore we are pretty cautious on the volumes, which I believe is not reflected by S&P. Therefore, that is much more knowledge of the market experience over the last weeks, and customer demand, and we discount the customer demands. That is the way we are managing that, and that is the way we are adjusting our guidance as well to reflect, again, not S&P, but and not customer demand, but what we believe may happen in the coming weeks. Regarding China, year to date in China, we are more or less in line with the market in terms of performance. For sure, the CES business, the ICE business, will continue to suffer because we know that the electrification in China is accelerating, and that is not the case in all the regions of the world. But in China, it is confirming. Therefore, CES will continue to suffer, not only this year, but in the coming years. And we will consolidate as well our footprint in China for the CES one. We believe that YFPO should be more or less in line with the Chinese market. YFPO was, from one side, traditional OEM, suffering from the transformation of the market, but was able to develop, as well, Tesla, being the only supplier for the exterior parts, and Tesla is pretty successful in China. Was also able to develop customers like NIO and all these new, I would say, customers, MG and so on. GM as well, is a customer of us. It's not so strong with BYD, because BYD has the strategy for exterior parts to be integrated, and this is only outsourcing a very small portion of their production, which we are capturing, but we are not benefiting today from the growth of BYD in China. BEV long-term development, that's a good question, huh? That means, each month there is a new, very clever guy having a great idea about how could be the BEV in the coming years. We always want it to be balanced in our strategy, to say, "Yes, we believe in BEV on long term," but we also believe that the ICE business will be successful on long term as well. Therefore, we are more than happy to have kept the CES business, in our portfolio. Even if some people did ask us some years ago, "Does it make sense?" We are very happy to see that the order book of CES will be at around EUR 3 billion this year, much higher than the sales, proving that we consolidate the market. We have a very dominant position in the U.S. on the ICE market. When I say very dominant position, it's much more than 70% of the market with the Big Three. And if there are less BEV, there are more combustion engine. Therefore, we want to be balanced on that, but it should benefit to the CES business. And we believe that the CES business, in term of sales, will remain at least stable in the coming five years, but with different geographies. That means America, Asia will become more and more important, where Europe and China will decline for sure. It's a very high free cash flow generation business, very low investment in term of industrial investment. We just need now to invest in R&D projects, because capturing new businesses and consolidating the market means as well, some development effort. But that is something which is very beneficial for us, with a huge payback. And again, I'm very happy to see that we have some customers in the U.S., we will have 90% of the market share in the coming years, and with very well-selling cars and being good exposed in case of the BEV wouldn't develop as expected. Makes sense. Thank you. We'll now move on to our next question from Christoph Laskawi at Deutsche Bank. Your line is open. Please go ahead. Hey, good morning, and thank you for taking my questions. It's actually not a lot left, but a follow-up to the UAW assumptions. We've seen that Ford reached a preliminary agreement with the UAW last night, which still needs to be ratified, but could you just comment on the exposure to Ford, and if they are moving back to work quickly, how- Yeah. So Alex, hello, Christoph? We lost you. His line got disconnected. Let me just move on to Stephen Reitman at S.G. Just to say- The line is open. Please go ahead. Yeah, go ahead. Maybe I will answer the question, even if the question was not finished, but we think we understood the question. Our exposure to the Big Three, Ford, Stellantis, GM, is pretty balanced. Therefore, we have been mentioning some numbers, but it's one-third, one-third, one-third. Therefore, depending on who is going to close an agreement earlier, there is no change if it's Stellantis, Ford or GM. It's one-third, one-third, and one-third. Hopefully, they will all reach an agreement pretty soon. When we were in the U.S. two weeks ago, they were all expecting to close an agreement one week ago. Now it's going in the other direction, and I think nobody knows. We just need to acknowledge that, since some days, there are more factories on strike impacting us, and that is what we do reflect in the new perspective for the year. Next question, or last question, I believe. Thank you. We'll now take our next question from Stephen Reitman at S.G.. Your line is open. Please go ahead. Good morning. Thanks for taking my question. Just one on volumes and compensation from OEMs. How big does the delta have to be between expected volumes and actual volumes for you to get compensated by OEMs? Clearly, the strike is a separate issue, but what about BEVs, for example? Thank you. Yeah, but I mean, you know that when we go for a new business with a customer, there is no guarantee on volumes, except for some exception. We just put in place the capacity we are supposed to have in order to serve them, if they are delivering the volumes. Normally, we discount 20%, and therefore we put less capacity. Therefore, in a way, the volumes are 20% below the expectation. We are okay with that. Here we are talking about 30%-50%. We have even some customers being 70% below the expectation, or having start of production being delayed by one or two years, where we have put capacity in place. And for sure, the target is to cover the fixed costs we have put in place, but it's pretty intense and not always very successful. Therefore, 20% below expectation, if it's regular volumes, we can absorb. Here, we are talking about 30-50, and again, we have many examples of 50% or even 70% in some factories. And for sure, that is something we cannot absorb. And these are very intense discussions with some customers, but no contract basis for that. For the coming businesses, because we learn as well, we will discount more to be more covered, I would say. That is a kind of learning phase we have with some customers as well. Thank you. We'll take our last question from Christoph Laskawi, once again, from Deutsche Bank. Your line is open. Please go ahead. Good morning, and sorry for taking my question again. I got disconnected. Sorry for that. The first one was just on the UAW strike, and it seems that Ford has reached an agreement, which still needs to be ratified. If you could comment on your Ford exposure in the U.S. or North America, and if that would ease the pain that you've currently factored in, in the guidance? And then the second question would just be a bit of a follow-up to the question just now. How flexible are you in the more or less BEV-dedicated footprint? If we assume BEVs are lower for longer, can you consolidate the footprint to some degree, or does it need a more intense restructuring? What should we assume if volumes stay same at the current levels for a year plus? Thank you. Thank you for your questions. The first one for Ford, we have the same exposure on Ford, GM, and Stellantis. It's one-third, one-third, one-third. Therefore, we will see if Ford is closing a positive agreement, that is, one-third less impact on sales. As far as I know, there is no change today or yesterday. There was no change in the Ford factories. Hopefully, it will change, but you know, we have the same exposure to each customer. Regarding the BEV, we have more than 20% of our headcount being temps in our factories globally. That means we always had a pretty flexible structure in order to absorb lower volumes. Here, we are talking about 50%, so potentially 30%-50%. I was mentioning before that in some cases it's even 70%. And we have some factories having different customers, and they can absorb that, and other ones being very exposed to one customer. It's the case of one of our factory in north of France. It's the case of one of our factory in the U.S., for an American traditional OEM. And it's the case as well for other factories as well in the module business in Eastern Europe. And if you have volumes being 50%-70% below the expectation, you cannot fix, it's just not possible. It's either you close, or you give the business back, or you find a commercial agreement with the customer. These are the topics we are discussing, because we cannot continue businesses like that. Therefore, this year it's about mitigating the impact. Next year it will be about either stepping out or finding a commercial agreement with the customer, but it's not a sustainable situation for us. Very clear. Thank you. Okay. Thank you. There are no further questions in queue. I will now hand it back to Laurent for closing remarks. Thank you. No, thank you. Thank you very much for the questions, and hopefully, you got more transparency. Again, everything we do is with the target to be full transparent with you, to avoid bad surprises, even if you may think it's a bad surprise today, but it just reflects how the market is developing since not some months, but some weeks, I would say. And the trend is intensifying with some volumes I was commenting before. It doesn't change the fact that we are continuing our strategy. That means it doesn't change anything in the way we want to develop the company. The strategy is the right one, and it is confirmed by our customers with the order intake I was mentioning before. It is requiring some investment, but we like to invest in the future, as you know that. We are still able to generate a decent level of free cash flow and to deleverage the company, which is for sure the middle long-term target of Plastic Omnium. Many thanks for your attendance today and for the questions, and talk to you soon. Thank you. Thank you. Bye. Thank you. Ladies and gentlemen, this concludes today's call. Thank you for your participation. You may now disconnect.