Hello, and welcome to TI Fluid Systems announcement of Q3 trading statement. I would like to pass you over to TI Fluid Systems CEO and President, Hans Dieltjens. Please go ahead, sir. Well, Good Morning, Everyone, and Welcome to TI Fluid Systems Q3 2022 trading update Conference Call. Thank you for joining us. I am Hans Dieltjens, the CEO and President, and I'm joined today by our CFO, Ron Hundzinski. First, I want to reiterate yesterday's announcement with Alexander De Bock joining TI Fluid Systems no later than the first of May, next year as our Chief Financial Officer and Executive Director succeeding Ron, who is planning to retire. Alex comes with a world of experience and expertise in the automotive supply industry, and I'm sure you will have ample opportunity to engage with him as he joins. This morning, I will be taking you through the key highlights for quarter three 2022 before heading over to Ron, who will take you through the numbers and outlook. Following that, we will be happy to take your questions. First, we remain excited and confident in our electrification Take the Turn strategy and are more than pleased with the growth in our battery electric vehicle order book. This, with quarter three lifetime business awards revenue of EUR 300 million of bookings, adding to a year-to-date total of EUR 0.9 billion of bookings. Similarly, our hybrid electric vehicle order book continues to grow and has bookings of EUR 1 billion lifetime revenue for the year-to-date. This impressive order book underlines our excellent progress on the organic growth electrification strategy. We delivered revenue growth of 10.4% in the nine months to September, compared to a global light vehicle production growth of 7.5%. At constant currency, revenue grew by 4.5%, underperforming global light vehicle production growth by 300 basis points. This is largely due to some timing issues on our tooling and prototype sales, the lumpy nature of recoveries, and the regional mix on battery electric vehicle growth, particularly in China. We do expect full-year revenue growth consistent with or slightly below global light vehicle production growth. With that, I will hand over to Ron to take us through the numbers in more detail and to cover full-year outlook. Ron, over to you. Thank you, Hans, and good morning, everyone. Q3 saw a rebound in global light vehicle production volumes from the severe microchip shortages and supply chain disruptions experienced in Q3 of 2021, with a 27.5% increase year-over-year. The group generated revenue of EUR 846 million in Q3 2022, a significant year-over-year growth of 28.8% at actual rates. At constant currency, revenue grew by 19.9%, resulting from the impact of a weaker euro, particularly against the U.S. dollar and the Chinese renminbi, which are significant sources of the group's revenue. Revenue growth has been somewhat constrained by regional volume mix on BEVs in quarter three, particularly due to lower part participation in domestic Chinese BEV platforms, which have experienced strong growth due to local government incentives together with some timing issues on tooling and prototype sales and the lumpy nature of recoveries. This, in turn, then impacted our revenue growth, which at constant currency compared to global light vehicle production growth, which was an underperformance of 760 basis points. By segment, on a constant currency basis, FCS Q3 revenue was 22.7% higher and did outperform the market in all regions except Asia Pacific, primarily China, while FTDS Q3 revenue increased by 16.2% year-over-year. Moving on to year-to-date performance, revenue increased by 10.4% year-over-year at actual rates and by 4.5% at constant currency. As I have mentioned already, revenue was positively impacted by the strong U.S. dollar and Chinese renminbi, which appreciated by 11% and 9% respectively against the euro. Reviewing segment revenue, FCS revenue increased by 8.9% year-over-year on a constant currency basis to EUR 1.4 billion and outperformed global light vehicle production volumes by 140 basis points. This outperformance was primarily driven by the execution of the EV business strategy with related program launches in Europe and North America. FTDS revenue declined slightly by 0.9% year-over-year on a constant currency basis to EUR 1 billion, mainly due to the disproportionate BEV growth in China. 2021 launch activities that were not repeated in 2022 and the planned exit of part of the business in Latin America. Looking at the regions, Europe and Africa revenue increased by 1.9% year-over-year at constant currency, while European and African light vehicle production volumes decreased by 0.9, resulting in outperformance of 280 basis points. Europe and Africa revenue was driven primarily by HEV and BEV business launches, which offset the impact of the Ukraine-Russia conflict in the region and our cessation of operations in Russia. In Asia Pacific, our revenue increased by 1.7% year-over-year on a constant currency basis, underperforming the market by 820 basis points and was impacted by the previously referred to increase in domestic Chinese BEV production, where the group is under-indexed. In North America, our revenue significantly increased by 12.7% year-over-year on a constant currency basis and outperformed North America vehicle production by 210 basis points. This outperformance was driven by thermal launches and program ramp ups. As an overview, you will see that our business outside of Asia Pacific are performing well and that Asia Pacific business is suffering from specific market dynamics in China. Based on our current view of Q4 2022, we now expect to report full-year results in line with the current consensus market expectations. Full-year revenue growth to be consistent with or slightly below global light vehicle production growth on a constant currency basis and full-year Adjusted EBIT margin of approximately 6% with historical levels of cash flow conversion. With that, I will hand the call back over to Hans. Well, thank you, Ron. With that, I would like to open the phone line now for any of your questions, please. Thank you. If you would like to ask a question, please press star followed by one on your telephone pad. If for any reason you would like to remove that question, please press star followed by two. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. Our first question today comes from the line of Dominic Convie from Numis. Please go ahead. Your line is now open. Good morning, gents. Thanks for taking the questions. Two, if I may. Just firstly, on the battery electric vehicle wins, perhaps if you could give us a little bit more detail in terms of the geographical mix there. Secondly, just in terms of the content per vehicle trends or assumptions that you'd make with regard to those new wins. Then the other question really around cost recoveries. Ron, you were very explicit back at the half year that you'd see the gross impact of about EUR 60 million in the first half and the recovery there was in the mid-sixties. Can you just give us similar sort of granularity with respect to what you've seen in the second half of this year? I think looking forward into 2023, obviously raw materials, perhaps not the pressure that it was, but we're seeing more pressure from labor, from energy. How do you think that inflation equation will evolve into 2023? Thank you. All right. I can maybe start with question one concerning the battery electric vehicle wins and the geographical mix on that. As we look at the EUR 900 million year to date September year to date of battery electric vehicle wins, what we can see is that the company performs very well in diversifying the different geographies. I can share with you that about 40% of the EUR 900 million of bookings are done in Asia Pacific, with the majority of that obviously in China, as this is the largest market for battery electric vehicles. Where we initially over last year and the year before had some more focus on our European and North American businesses in that segment, we have now established quite a good spread on that. The second point on the CPV trends for the EV wins is in line with our expectations and in line with what we have shown historically on the CPV trends. As you know, there is an opportunity. We obviously don't win all parts on all electric vehicles, so there is a mix of elements, but we can still see that the CPV of our electrification wins are significantly higher than of our ICE wins going forward. With that, I would like to hand it over to Ron to talk a little bit about the cost recoveries, H1 to H2. Thanks, Hans. You're right. H1 headwinds were about 64 million-65 million. Recoveries were EUR 40 million. Headwinds were about EUR 24 million. The percentage we tracked of recoveries was 62.5%, or say 63%. At the first half, I'm gonna refer to the first half conversation that we had. For the full year, we were targeting about a 70% return on recoveries. That would imply mathematically that the second half would be, call it in the mid-70% related to the full year of 70%. Let's say 75%, 76%. I'd say that we're still on track for that, maybe slightly lower, you know, but we have a lot of opportunities. It's day by day. I think we have what three calls a week probably on this topic, negotiating a list of customers. I would say that in general, we're on track with what we said at midyear, although we could be plus or minus a few depending on some final negotiations with customers. The team is doing a great job putting the pressure basically on the customers to get our recoveries. Thanks, Ron. And just how that might evolve those discussions into 2023, any insight in that yet? Hans, man. How about 2023? Well, what we are currently seeing is we see no indication that these increases are or the inflationary increases elements are decreasing for now. We continue to work on the recovery aspects going forward. We are preparing going through our budget, but we are obviously incorporating into our forecast recovery of inflationary increases as we have done historically in order to assure we do provide some margin improvement going forward. Yeah. The other question about energy, I just looked at my notes, and labor. I think the way it went through the year is we saw material come first, resin, steel, and some components, followed by the energy primarily driven in Europe, as we talked about at H1, because of the war, right? We saw energy come. Now in energy, we did have some contracts earlier in the year that now are rolling off, so now we're gonna go back to mark-to-market, so that's gonna start to increase our cost. Labor, I would say, would be the third element. Now we're starting to see labor as negotiations come up with some of our work councils, so to speak, unions going on. Employees now are starting in certain parts of the world requiring more inflationary compensation for their inflationary environment. In North America, for example, we know that we're paying higher wages to some of our plants in the Midwest. We know that some of the unions in Europe are now looking at some of them are required by law, right? Higher inflation, and some of them will come in this next wave coming in the next year when they start to negotiate higher wages. That's how it came. It came material first, energy, and then labor. Thank you. Thank you. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. The next question today comes from the line of Vanessa Jeffriess from Jefferies. Please go ahead. Your line is now open. Hi. Thank you for taking my question. You talked a bit about your ups and underperformance in the first nine months. I was wondering if you could talk about the Q3 specifically. Just if I look at IHS, it would seem that you underperformed maybe quite a bit in Europe and then a bit in North America. Could you talk about the geographical mix there? Well, the underperformance in Q3, as you noted, was 70 basis points. It was mainly due to China that underperformed. The reasons for the underperformance in Q3 are a set of things. The first one is that you have to see that Q3 2021, we had 50 basis points of outperformance. That had to do with some seasonality and driven by timing of launch revenues, what's mainly tooling, prototyping, revenues that have to some degree been delayed. They're still there, but they're just being delayed, which did not show up in our revenues. The second part is that some of the recoveries are lumpy and therefore move into another quarter. The third element is because of the mix effect of EVs that is not offset. That was mainly present in China, which is not offset in Europe and North America, partially because this TPD, the tooling prototype and development revenues that were lower in Q3. Overall, we expect the full year to be in line or slightly lower than global light vehicle production. We expect to catch up in Q4 going forward. Okay. Maybe if I could just- Yeah. It's been. This year, the mix impact has been severe. If you take a look at the performance by quarter, quite frankly, it was all over the map. It was underperformance at 320, overperformance by 330, underperformance by 760, and then we expect overperformance again in the Q4. I think the regional mixes are having a significant impact on the business because the volumes of like BEVs in Europe, I think in Q3, was about another 1.7 million of production in China, and like half of that was in probably 4 BEV customers that we don't have content on, for example. That's super exaggerated, the underperformance in the quarter. Okay, great. Can I just clarify the comments on the outlook? You say that revenue in line with light vehicle production and IHS is 6% and then margin of 6%. I would have thought the consensus before was margin of 6.4%. Obviously there's a higher revenue base, but what exactly does market expectations mean? Actually, this is a very good question. I'm gonna slow down and explain this. Hopefully, I do a good job on this for everybody, okay? Let's talk about the top line first. Now, it all depends on your reference point of what the top line number was at H1 when we gave guidance for the full year. My math, for example, the walk is in two areas, FX and market volumes. At that time, we anticipated global production volumes to be around 77, 78. Let's call it 78 at this point. We now anticipate those market volumes to be around 80. That would indicate about a 2.6 to almost a little bit higher if you go 77, nearly 3% increase in volumes. That volume increase would contribute, incremental margins lower than we typically see, but that would contribute incremental margins. Now, the other area I wanna talk about is FX. FX is a tailwind of maybe 1%-2%. Two-thirds of that volume, of that revenue increase is volume, market volume, and one-third is FX. On the FX portion, we only get, say, 6%, EUR 0.6 on every EUR 1 of increase because you're only flowing through the margin of the business. You don't, you do not get incremental margin of 20%. It just doesn't happen. It's a translation, okay? You only get the 20% incremental on the volume increase. All right, I'm gonna stop there for a second. That's real important where the revenue's going. We're getting tremendous tailwinds from FX that doesn't have a drop through like you do on when you ship more product. What's happened to the business is the sales are moving up because of FX, a little bit of volume as well, as I said, and mathematically, because of that, it's gonna deteriorate margins. It'll go from 6.4% down to 6%. Now you have a little bit of a headwind. On a nominal amount, we are slightly lower than we were at H1, but only marginally, maybe EUR 10 million only. A lot of the margin deterioration is because of FX translation. It's a combination of both. Now, I can't give you specific numbers because I don't know each one of your models, what your top line number was. I can tell you on a nominal basis, we're slightly below, primarily some operational and some recovery headwinds, but the margin deterioration is exaggerated by the fact that the translation doesn't flow through at the same rate. Does that make sense, Vanessa? Yeah, it does. Thank you. All right, that's clear. Okay, just a third one, if I could. You give this number for hybrids of EUR 1 billion for the year, and I think in the first half it was EUR 300. Is that right? It seems like quite an amazing Q3. Is there any more detail you can give on that? Well, we cannot release exactly what the wins were, but what I can share with you that of the hybrids, more than 60% of the bookings were in plug-in hybrids. As you probably understand, this is of great value to our company as the content per vehicle we have on a plug-in hybrid is larger because of the specific engineering and conditions of a plug-in hybrid. We were very successful with some large customers to book large portion of their hybrid and more importantly, plug-in hybrid vehicle what was very important to work that we got in Q3. I think this is resulting from the technology that we have developed over several years on how to technically handle pressure inside of the fuel tank, and that combined to our lines business really made us move in the right direction here and have a significant amount there of bookings during Q3. Oh, thank you. Thank you. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. The next question today comes from the line of Akshat Khandelwal from JPMorgan Chase. Please go ahead. Your line is now open. Morning. Akshat Khandelwal from JPMorgan Chase. Three questions from my side as well, please. The first one on cost recovery. Essentially you have lowered your cost recovery target from the 75%-80% range to the 65%-70%. Can I just understand the different drivers in that? Are you finding it more difficult to claw back raw materials from OEM or is it mainly linked to energy and labor? That's the first one. I'll follow up with the other two later, please. I can start off on that. Indeed, in H1 we did say that 75%-80% of cost recovery in H2 would be possible. We're now at 65%-70%. First effect is that what we saw is that immediately after H1 or last month of H1, we saw significant increases, especially in energy costs, and especially in Europe where it kicks in. This combined with the labor increases, as Ron explained, you had some phasing in the different increases during the year. Started off with the materials and then energy came, and now labor is coming. We saw some additional increases coming through H2, and are still coming through H2, where you understand that there is a natural lag in the recovery phase. It overall means we're still going for the higher level of recovery, but given the lag factor, we will see more of that coming within next year, as we progress in our negotiations with the customers, on that. Thank you. Just to follow up on that. If I understand you correctly, you're saying that this is not a structural headwind, you still expect to get the remuneration in 2023. Another follow-up on that is when we think about 2023, the elements that drive inflation, as you said, will change. Raw materials are coming down, energy and labor is going up. Does that mean that your overall pass through should be lower on overall inflation going into 2023? What are your first question for 2023? Yes. To your second question, do we see the engine changing gear? Well, you have to see that on the raw material side, we generally work with contracts. More than half of our commodities are contract-based, so you will have a period, depending on the length of the contract, that you will see a certain cost level of that. Any market-driven or index-driven change doesn't necessarily reflect in on a short period to us. We will see a similar activity as we saw in this year going forward on it. You also have to see that some of the indexes are not necessarily directly linked to the price. We buy these products for as there is a growing difference between what indexes tells you and what the market price because of other conditions of the supply base are and what we are experiencing. We consider to still see quite a similar dynamic into next year. Now, having said that, to your second point is that the increase in energy and labor what is more prevalent in 2023, given what we just discussed, that is obviously gonna be a key factor. We are and remain confident that we can recover these in 2023 to similar levels as we said previously for H2 between 75%-80% going forward. Thank you. The second question on the BEV business and thermal management. First, congratulations on another quarter of good order intake. Can you talk about the current contributions to revenues from these businesses, maybe on the back of the orders that you already won in 2018, 2019? What is the current revenues from these business lines in 2022, and how do you expect that to grow probably into next year? Well, I think we struggled a little bit with your question. Can you just repeat the question? Is it? Are you asking what revenues we currently have in thermal business? Yes. On the BEV and the thermal management business, current revenues expected for 2022, and how do you expect that to grow into next year? Well, what we see is that the global market in battery electric vehicles is about eight, maybe up to 10%, depending on the numbers you look at. With our current revenue portfolio, we slightly outperformed that as a percentage of our sales, given we have some higher value programs with some of our businesses and with some of our module businesses also that we have acquired in history. Second part is that if you look forward, you can see in our awards that we are as a percentage of our total awards, we're significantly higher. Our replenishment rate, especially in battery electric vehicles, is actually outperforming. What would mean that the underperformance that we see on the ICE as ICE goes down would be more than compensated by the thermal business actually delivering an overall outperformance for the company between 3%-4%, as we have set, historically. We are in next year looking forward to an expansion of our thermal business and of our battery electric vehicle business and outperforming the market in that. Understood. Thank you. Last one for Ron, probably on the debt structure and interest cost. Ron, could you quickly remind us on the structure of your debt, probably floating versus fixed debt, any refinancing that is due in the next 12-18 months, and if FX has an impact on the total interest cost that we should be thinking about going into next year? Thank you. The great news is nothing's due. We're about 50% float in term loans, 50% in a Eurobond that's fixed at 3.75%, which these rising rates have no impact on. Now on term loans, we have a euro and a U.S. version, and those are impacted by these rising rates. We could have some options. We could pay down some debt and mitigate some of this if we choose to do, but nothing's due. I think the bonds are 2029. The terms are due 2027. Now, the impact on currencies is somewhat of a headwind on the euro term, which would creep up in when you do the translation as a higher debt number. It's not significant, but that is the impact that we have. The good news, like Pat said when I started with this, nothing's due for quite some time. We did a refinancing in 2022, I'm sorry, 2021 in the spring. That was a fantastic deal. We locked in some good rates. We do have some mitigation activities we'll probably discuss here as a management team on the term loans. Thank you. Thank you. There are no further questions at this time, so I'd like to hand the conference back over to Hans Dieltjens for any closing remarks. Please go ahead. Okay, thank you all. If there are no further questions, and to close, thank you for participating today, and we look forward to further update you on our progress in January 2023 with our full year trading update. Thank you very much, and please remain safe. With that, operator, please disconnect the call. Thank you. Thank you. This concludes today's conference call. Thank you all for your participation. You may now disconnect your lines.