Good morning, everyone, and welcome to Nemak First Quarter 2024 Earnings Webcast. Armando Tamez, Nemak CEO; Alberto Sada, CFO; and Denise Reyes, Investor Relations Officer, are here this morning to discuss the company's business performance and answer any questions that you may have. As a reminder, today's event is being recorded and will be available on the company's Investor Relations website. I will now turn the conference call over to Denise Reyes. Thank you, operator. Good morning and welcome, everyone. We very much appreciate your participation. Armando Tamez, our CEO, will lead off today's call by providing an overview of business and financial highlights from the quarter. Alberto Sada, our CFO, will then discuss our financial results in more details. Afterwards, we will open for a Q&A session, which participants may access via dial-in or webcast. Before we get started, let me remind you that information discussed on today's call may include forward-looking statements regarding the company's future financial performance and prospects, which are subject to risks and uncertainties. Actual results may differ materially, and the company cautions you not to place undue reliance on these forward-looking statements. Nemak undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise. I will now turn the call over to Armando Tamez. Thank you, Denise. Hello, everyone, and welcome to Nemak First Quarter 2024 Earnings Webcast. During the quarter, we improved our EBITDA and margins on the back of operating efficiencies and solid volumes in the ICE powertrain segment. However, we experienced a slight decrease in our top line, which was compounded by mixed results in our main regions and lower aluminum prices. Altogether, EBITDA increased 10% and revenues dropped 4%. In terms of financial performance, we are determined to continue delivering solid results that will lead to generation of cash, which will be allocated to reduce net debt and leverage the company. Our target remains a ratio of 2x net debt to EBITDA, which we are confident we will achieve over time as we capitalize on solid margins and reduce investments. In parallel, we have engaged in negotiations with our customers to address two main subjects. On the one hand, we have initiated negotiations with our customers to compensate for underutilized capacity in the E-Mobility, Structure, and Chassis Applications segment. This situation follows the latest industry trends, which indicate a slowdown in electrification. For situations in which we have experienced volume fluctuations and capacity is already installed, we are requesting commercial compensation to offset the associated impacts and, therefore, prevent margin deterioration. Conversations with our customers have been productive and will evolve as volume unfolds. On the other hand, we continue to face strong cost pressures, primarily stemming from labor cost inflation. We aim to recover these impacts through similar dynamics as in previous years by negotiating price increases with our customers. To further improve our margins and counteract cost pressures, we are determined to maintain a prudent financial approach and have established a cost reduction program focused on identifying opportunities and creating a clear pathway to capitalize them. We are also evaluating strategic options for assets that are not operating or have profitability below our thresholds, aiming to optimize our financial performance. By combining the negotiations intended to improve our top line with our cost reduction initiatives, I am confident that we will recover our solid margins. Moving on to strategy executions, I want to reiterate the flexibility embedded in our strategy, which enables Nemak to participate in this dynamic market. Our current product portfolio serves the full range of light vehicles, including internal combustion engine, hybrid, and electric models. The components in our ICE powertrain segment have led the company to a leadership position and continue to represent the majority of our revenue base. We have ample capacity in the segment and outstanding know-how, with the ability to produce more volume if needed. In the E-mobility, structure, and chassis application segment, we have also laid strong foundations to capitalize on the transformation of the automotive industry. While current trends point towards a slower growth in electrification, Nemak is certain of the industry's electric future, and we will continue to meet market demand, strategically positioning itself to smoothly transition towards sustainable mobility as the automotive industry continues to develop. I would also like to emphasize that our structural component portfolio is comprised of propulsion-agnostic components that can be used in all vehicles, whether internal combustion engine, hybrid, or electric, and to that end, they are supportive of our flexibility strategy. We have made progress on the commercial front, and we were awarded a business of approximately $55 million, with 90% accounting for E-mobility, structure, and chassis components. This new business will use existing capacity and technology while leveraging our trademark for innovation. As a result, and maintaining our selective approach, our E-mobility, structure, and chassis applications order book stands at approximately $1.8 billion. Moreover, we successfully launched and started to produce new components in our European facilities. Our plant in Poland initiated production of two structural components, tapping into our existing high-pressure die casting capacity. Their components include a single large casting for BMW and will be used across their internal combustion engine, hybrid, and electric vehicles. Additionally, our facilities in Germany and Hungary launched different ICE powertrain components that include light vehicle and motorbike applications. All projects were heavily supported by existing capacity and exceptional knowledge in casting technologies. Our innovative lightweighting principles proved their value, as we reduced the weight of one single component by more than 14 kg, further supporting light vehicle efficiency. Overall, I am pleased with the results from our operations in Europe, and would like to extend recognition to our people in the region. The contributions I just mentioned in the launch of new programs, as well as the solid performance in Europe, have been invaluable for the company. Moving on to our sustainability agenda, I am proud to share that Nemak earned an upgrade on the CDP Climate Change Questionnaire. We received a score of A-, which denotes a transition from management to leadership level. This high rating demonstrates that Nemak implements best practices in its strategy and actions to mitigate climate change. CDP also awarded Nemak the Top Supplier Engagement rating of A for the third consecutive year, keeping us on the CDP's Supplier Engagement Leaderboard. This benchmark is comprised of pioneering companies that are driving the transformation of their businesses towards a zero-emissions future. Another highlight in our sustainability agenda is the certification of three of our facilities by the Aluminium Stewardship Initiative Performance Standard. The certified plants are located in Brazil, Poland, and Slovakia, underscoring our responsible manufacturing practices and sound governance throughout our operations. This rigorous ASI certification program is recognized as the most comprehensive voluntary sustainability standard initiative for the aluminium value chain. These achievements highlight Nemak's progress on its roadmap towards a sustainable future, with efforts to mitigate climate change fully embedded in its business strategy. As a final remark and as a part of our social agenda, Nemak Mexico received recognition as a socially responsible company from Cemefi, the Mexican Center for Philanthropy, for the fifth consecutive year. Our ESG practices are highlighted by this recognition, alongside a strong commitment to our talent and the communities where we operate. This concludes my remarks. Thank you for your attention, and I will now hand off the call to Alberto. Thank you, Armando, and good morning, everyone. I will begin with an overview of Nemak business performance for the first quarter of 2024, followed by a discussion of relevant industry trends and financial results. During the first quarter, we achieved a 10% year-over-year EBITDA growth, despite lower volumes, which led to a 4% year-over-year decrease in revenue. With dynamics from previous years still in play, we are in discussions with OEMs to share the burden of inflationary pressures, including increased labor costs in the main regions where we operate. As a reminder, these negotiations are retroactive to January 1st. As mentioned in the previous earnings webcast, in addition to the inflation adjustments, we are currently negotiating compensations for idle installed capacity in the EV segment, as the projected electrification ramp-up rate has clearly slowed down. Nonetheless, these investments have placed us ahead on the learning curve in joining and assembly processes and set us in an outstanding position to capture additional business once the industry resumes the electrification phase. Moving on to industry trends, as indicated before, the market is signaling a softening in the growth rate of electric vehicle adoption, which translates into a favorable scenario for Nemak, as we see higher volumes in the ICE powertrain segment for which we have capacity in place. During the first quarter, the seasonally adjusted annual rate for light vehicle sales in the U.S. was 15.4 million units, 3% above last year. Demand for light vehicles in the region remains robust, as macroeconomic factors in the region remain solid, supporting light vehicle demand. In turn, first quarter production in North America remained stable year-over-year at 3.9 million units. I would like to point out a significant change in the mix of light vehicle sales in the region, as OEMs are prioritizing the ramp-up of recently launched SUVs, most of them with ICE propulsion. In Europe, seasonally adjusted annualized sales increased 6% in the first quarter to 16.3 million units, on the back of pent-up demand and changes in the sales mix, which also included increased ICE vehicles. These results came despite challenging economic conditions, including a declining government incentive. During the first quarter, light vehicle production in the region decreased 7% year-over-year to 4.1 million units, as production schedules continued normalizing compared to the first quarter of 2023, when we saw higher production to fulfill existing backlogs. In China, the seasonally adjusted annual rate sales rose 8% year-over-year in the first quarter to 22 million units, supported by improved economic conditions and government initiatives aimed at stimulating the automotive industry. In light vehicle production, China posted 8% year-over-year growth for the first quarter, totaling 6.3 million units by quarter-end. These increases were driven by strong exports and favorable domestic demand. In Brazil, the seasonally adjusted annual rate of light vehicle sales for the quarter was 2.2 million units, 15% higher year-over-year, aided by favorable domestic demand. South America's light vehicle production decreased 6% year-over-year in the first quarter of 2024 to 0.6 million units, due to continued inventory optimization. Turning to Nemak results, volume decreased 2% year-over-year to 10.6 million equivalent units. This was due mainly to lower production among our customers, particularly in North America, and influenced by lower requirements in the E-Mobility, Structure, and Chassis segment. As a consequence, revenue in the first quarter was $1.2 billion, 4% lower compared to the same period of 2023, due in part to the decrease in aluminum prices. In turn, EBITDA was $145 million, representing a growth of 10% year-over-year. This number was driven by customer negotiations and operating efficiency, primarily in our European facilities. As a result, EBITDA per equivalent unit for the quarter was $13.7, 11% higher than the same period of 2023, in line with the same annual estimate included in our 2024 guidance. In the first quarter, we reported an operating income of $55 million, compared to $49 million in the same period of last year, supported by EBITDA growth. Net income totaled $25 million in the quarter, compared to a net loss of $15 million in the same period of last year, as higher results in combination with foreign exchange gains offset higher interest expenses. Moving on to our balance sheet, our working capital increased sequentially by $120 million, associated with production increases in the first quarter, consistent with seasonal trends. As of the end of March, our net debt was $1.7 billion, 8% higher sequentially, related to the increase in working capital just described. As a result, the net debt-to-EBITDA ratio was 2.8x versus 2.7 times in December of last year, while the interest coverage ratio was 4.6 times versus 4.8 times in the same time frame. During the quarter, capital expenditures totaled $104 million, 17% below the same period of 2023, as we streamlined investments to adapt to the industry's updated perspectives on electrification. Moving to our regional results, during the first quarter, North America revenue decreased by 12% year-over-year to $616 million, due to the effect of lower volume and product mix. EBITDA was $58 million, down 21% compared to the same quarter of 2023, as a result of a lower top line, the negative foreign exchange effect on the Mexican peso, and the persistent inflationary pressures, mainly in labor. We continue actively working with our customers to address this year's inflation effects. In Europe, revenue grew 5% year-over-year to $446 million, driven by higher volumes, which was partially offset by lower aluminum prices. In turn, EBITDA in the region increased to $70 million from $43 million recorded in the same period of last year, favored by an improved product mix, lower energy costs, and commercial negotiations. These factors, together with operating efficiencies, more than offset inflationary effects in the region. In the rest of the world, revenue was 11% higher year-over-year, totaling $150 million. This growth was primarily attributed to higher volume in Asia and improved product mix, which more than offset the decrease in aluminum prices. EBITDA in the region benefited from the volume, product mix, and sustained operating efficiencies, resulting in a positive contribution of $17 million, 6% higher versus the same period of last year. In other recent developments during the quarter, we held the annual review process with rating agencies. Fitch Ratings and Standard & Poor's revised their outlooks to negative from stable, with Fitch maintaining its investment-grade rating and S&P maintaining Nemak one notch below investment grade. Additionally, Moody's Ratings downgraded our credit rating to Ba2 from Ba1, keeping a stable outlook. All of the rating agencies highlighted the company's current liquidity and debt maturity profile as positive factors. Nonetheless, the increase in leverage derived from investments in the new segment weighed on their decisions. I want to reiterate that in those cases where the capacity remains unused, we will see compensation from our customers. In addition, we expect that as a consequence, the ICE lifecycle will extend, therefore improving our cash generation through reduction in the CapEx needs and continuous use of existing capacity. It is important to highlight that we are following a comprehensive approach to optimize operating results, including initiatives directed to improve our top line, such as the aforementioned commercial negotiations, and also including initiatives to improve our cost structure. These elements, in conjunction with disciplined capital allocation that prioritizes the leveraging and maintaining capital expenditures within the range provided in guidance, will support our cash flow generation and, consequently, our credit metrics in the coming periods. To conclude my remarks, allow me to reemphasize that a slower adoption of electric mobility translates into extended production of internal combustion engine and hybrid vehicles, which currently represent most of our revenue base. This gives us the opportunity to harness our existing assets, technology, and expertise in the medium and long term. We are confident we will benefit from the changes in the product mix between ICE and EVs and continue delivering value to our shareholders. Thank you for your attention. I will now turn the call back over to Denise. Thank you, Alberto. We are now ready to move on to the Q&A portion of the event. As a reminder, participants may ask questions directly via dial-in or send questions in writing via web. Operator, please instruct participants calling in on how to place their questions. Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, to ask a question, press star one. To remove yourself from the queue, press star two. One moment while we pull for questions. Thank you. Our first question comes from Andrés Cardona with Citi. Please state your question. Hi, good morning, Armando. Alberto, thanks for the presentation. I have three questions. The first one, you were saying you are confident about recovering your target margins. Could you please share with us what are those targets? Not sure if you look at it on a per-equivalent unit or however you think about these target margins. The second one is, you were saying on the electric vehicle volumes that have been coming below expectations, you are negotiating some compensations, right? Are those compensations enough to guarantee the adequate return over the invested capital, or they are just like a partial compensation that you are able to get but still keep you below those return over invested capital targets? The last one is, on European margins, are they sustainable from the levels we saw in the first quarter, or are they reflecting a non-recurring commercial negotiation adjustment from perhaps 2023 that are benefiting the metric for the quarter? Thank you. Yes, thank you, Andrés. Thanks for your questions. Let me start with the first one. As indicated, we have engaged ourselves in a series of initiatives to improve our operating performance overall, and those are within different aspects. On one side, as has been described at length, we are engaged with customer negotiations to pass on the inflationary pressures. On the other one, we're also working towards improving our cost structure. So we have engaged ourselves in a very strong cost reduction initiative to try to offset part of this inflationary effect. So with those two measures, plus the extension of the ICE business, which at the end translates into better use of the existing assets, leads us into a position to recover the margins that we have had before. Right now, we are operating at levels of close to $13.7 per piece, and eventually, we should be aiming at levels between $15-$15.5 per piece. Certainly, it's going to take a little bit of time, but we're confident we're going to get in that direction. Yes. Andrés, related to your second question related to volumes, our strategy with our customers that we're pursuing, in which our customers are seeing lower sales in the electric vehicle, what we are doing is pursuing two elements, as I indicated in my remarks. The first one is a compensation for the underutilized capacity. We are expecting to get a lump sum for the underutilized investment. In parallel, we need to adjust prices accordingly. If volumes are lower than that installed capacity, we are also negotiating a price increase to maintain our margins. This is something that we are confident that, based on the relationship that we have with our customers and the fact that we invested and they know, our customers, how much money we invested, so we are confident that we will maintain our margins. Andrés, related to the third question on Europe, yeah, certainly, we are quite happy with the results that we have been able to achieve. You may have seen that on a quarterly basis. We have maintained a similar level of margins in Europe, and going forward, we expect them to be at this level. Certainly, the European business has been supported on one side with a good volume and product mix, but also on the other side, good discussions and negotiations with our customers that have led us to adapt the pricing structure for the new cost reality. So we expect those margins to continue at very similar levels for the remainder of the year. Thank you, Armando and Alberto. Congratulations for the first quarter results. Thank you. Thanks, Andrés. Thank you. Our next question comes from Alfonso Salazar with Scotiabank. Please state your question. Yes, thank you and good day, everyone. The first question I have is regarding free cash flow generation. I just want to confirm that you still expect to generate positive free cash flow for 2024 and 2025. And also, if you can provide remind us what is the net debt-to-EBITDA target for Nemak, and where do you think it would be by year-end, by 2024 year-end? The second question, well, it's more a request than a question, but it has to do with the long-term guidance that you provided back in 2021, which was very helpful to understand how Nemak expects this EV adoption curve to materialize in time. However, the situation has been very different, and it's moving way more slowly than we anticipated back then. Just wondering if you can provide new guidance or prepare something that an update of that guidance that you provided back in 2021, and maybe some comments on what has changed relative to the guidance that you provided back then today? Thank you. Alfonso, let me start with the first question. Thanks for them. Related to the free cash flow generation, as you indicated and we have highlighted, we're expecting positive cash flow generation in both 2024 and 2025. In 2024, it will be marginal, and it will be driven by the actions that we have been sharing both on the operating side as well as on the recovery of some of the gains we have with customers related to both unused capacity as well as inflation. So that should be way more positive in 2025 as we continue reducing our CapEx levels given the push-out of the EV segment. Your second question related to our leverage, the target for the end of the year should be somewhere around between 2.5x-2.6x net debt-to-EBITDA, and that's both a result of EBITDA growth that will help with that ratio as well as the cash generation that should help us improve a little bit our debt as of the end of the year. So this should be a temporary spike during this, as we saw in this first quarter, slightly higher than last year. We should be at similar levels in the next quarters and then down at the end of the year as all these elements materialize. Alfonso, related to your question about the EV adoption, what we are seeing, again, is different dynamics in the market, and I think it's quite difficult to predict the penetration of the electric vehicles. Even our customers are reviewing their business plans. What we have seen compared to 2021 is that, for instance, some of our customers were expecting that in North America, the EV penetration will be up to 50%, and in Europe, about two-thirds by 2030. Now, our customers are basically addressing what the consumer is telling them, which they are, to some extent, not as keen to buy electric vehicles due to several factors. I think the one is vehicles are more expensive, the charge is slower, infrastructure is not in every single country, and also, the resale value of electric vehicles is lower than for the normal internal combustion engine. So yes, we need to review our business plan, and in the best time, we will have, again, this business plan shared with all of you. I think, as I indicated, the market is volatile. On the other hand, I think it's very important to address the following points. Nemak revenues today stand 88% based on components for internal combustion engine. We have significant capacity to produce what the customers need in all regions, and I think we will take advantage of that. Certainly, our customers today are telling us that the market penetration for electric vehicles, for instance, in North America today, is below 30%, and that is very positive news for Nemak. Also in Europe, they are lowering, for instance, the expectations in terms of electric vehicles, and I think this is very positive for Nemak. That will give us an opportunity to use our existing assets, our existing technology, to continue supporting all our customers worldwide with significantly less CapEx, and that is very positive. I was actually disappointed by one of the rating agencies that saw this as a threat for Nemak. We see it the opposite, but I think we need to educate some of the people that are following that for us, we see positive news that the electrification is at a slower pace. That will give us an opportunity to improve our cash flow, reduce our debt, and certainly be prepared once the market is ready for the electric vehicles. Thank you. That is very useful. Thank you. Thank you. Just a reminder to ask a question. Press star one. To remove yourself from the queue, press star two. Our next question comes from Alejandro Azar with GBM. Please state your question. Hi. Good morning, Armando, Alberto. Thank you for taking my questions. I have several ones, so if I can, if I may, can I take them one by one? Go ahead. The first one is on your margins. If I hear correctly, you are targeting 15.5 per equivalent unit. Can you give us some color on the ramp-up to those margins? I don't know, building blocks. How much are you expecting from operating leverage? It's the bigger chunk to reach that on account of pricing. That would be my first one. Sure, Alex. Thanks for the question. Yes, certainly, there is a series of elements that take us to those levels of margins. And please recall that we used to have those margins just back a few years ago. So there are several factors that we are addressing. As we have highlighted before, there are inflationary pressures that have, unfortunately, affected the results on our side, and they vary differently on the different regions. Particularly in the North America case, for Mexico, we have exchange rate effects, which, given the strong appreciation of the peso, that has taken a toll on our margins, which we are currently addressing with our customers related to pricing. So an important one to take us there is essentially to adapt the pricing structure, to continue doing so, for this new cost structure that we have because some of our prices have economics dated from pre-pandemic levels that we need to fix. So we're confident that we'll be able to get to an agreement, long-term agreement, with our customers so that we can secure the production, particularly on the ICE side. But then we also have, as a company, we always strive to be as efficient as we can, and we look for efficiency all across our regions, particularly in North America as well. So there, we think that we also have a little bit of room to maneuver. And last but not least, the mix. I think, in general, we have good overall product portfolio that will, even if it stays on the ICE side, will continue evolving towards more higher-value-added type of products. So I would say those are the three main elements. It's pricing, it's operating efficiency, as well as mix that will drive margin improvements. Okay. Alberto, on your capacity utilization, is there any way that you can share how does it look on the powertrain side and on the EV side right now, or? Well, on the EV side, certainly, as we are seeing the level of volatility in the market, certainly, that's something that we're currently addressing with our customers. On that side, we're about two-thirds in capacity usage versus what we had estimated, what we have. So there, we are essentially working through, again, with the customers to try to recover part of those investments that are currently not being used, at least for the time that it's going to take the industry to recover the launching phase. Related on the traditional ICE components, there, we have plenty of capacity. So there, as you know, we have invested already for a long period of time, and that capacity, obviously, sits there for us to produce in case the ICE continues with the levels that we're seeing right now. Okay. And my last two questions would be on CapEx and on your strategy on EVs. On CapEx, if I understand correctly, around $100 million out of your $400 million for this year should be allocated to EVs. With the slowdown on the EVs, is that number going to change for this year, and is it fair to account in 2025 this number becomes zero, and you probably only do maintenance on the EV side and the rest is powertrain? And the other one is on the strategy regarding how you is it changing how you approach the biddings for programs across EV platforms? Thank you, Alex. I will try to respond to your question. First, I think when we are talking about EVs, we are talking also about chassis components as well as structural components. As we indicated, most of the parts that we are producing, with the exception, for instance, of battery trays, are propulsion-agnostic components. Those parts will go on vehicles that are internal combustion engines, hybrids, or electric. So I think what we are seeing right now from different customers is that they are switching back to ICEs and hybrids. Those are the products that are in high demand today, both in North America and in Europe. So in that regard, I think we could use our assets better and investments. We continue to be very sensitive to, again, our CapEx. We are, again, trying to limit this year to less than $400 million in total CapEx, and certainly, we will take a closer look. One of the things that we are doing today is that we are asking most of our customers to help us with some of the investment. If they want us to produce some of the parts, we are asking them to contribute, and we have been so far successful with some customers, and we will continue with that to reduce our risk, again, with this volatility on the EV side. Okay. And regarding the approach on the bidding of programs, with the slowdown that you're seeing, is that changing? What we are seeing is, again, that some of the customers now realize that the EVs are not selling to the level that they were expecting. You can see, and this is public information, most of the OEMs have reduced their expectations, and now they are talking about increasing their capacity for internal combustion and hybrids. And certainly, we are watching this very closely and being very conservative in terms of what is the products and the customers in which we are going to invest. And certainly, as part of our negotiations, we are asking also for price sensitivity related to volume. So in the event that the volume doesn't materialize, that customers need to adjust prices. Okay. Thank you. Thank you both. Thank you, Alex. Thank you. There are no further questions over the phone at this time. I'd like to turn the conference back over to Denise Reyes to address the questions placed via web. Thank you, operator. We will now move on to the questions from the web. The first question is from Marcelo Motta from J.P. Morgan. Could you please provide more details on how much the underutilized capacity in the EVSC segment could impact margins in the next quarters? Thank you, Marcelo. I think we have already answered that, but I'm going to repeat it. Certainly, as I indicated, we have already presented claims for the customers that we see volumes below the installed capacity. That's the first part. Second, we need a price adjustment as well to compensate for this volume drop. In addition, Marcelo, and we mentioned already this, we have implemented a significant cost reduction initiative in the company at a global level. So we are looking for further efficiencies in every single plant and also reducing our costs. And we are, again, with the entire management team, focusing on improving performance and efficiencies. And in the summary, we're confident and committed not only to meet but try to surpass our guidance. Thank you, Armando. There is a second question from Marcelo Motta. Were there any one-off impact in first-quarter margins given the significant increase on a year-over-year basis? Well, on the margins, as it was highlighted, we feel confident with this level of margins going forward. So there is a combination of different elements. As we saw, there was lower volumes, but at the same time, we have very good performance in Europe, which is, on average, pushing our margins. So that increase in margins in Europe will be sustainable. That has a combination of commercial activities, better mix, as well as efficiencies, a little bit of exchange rate as well. So I would say that in combination, this is a fairly recurrent type of result. Again, a combination, a few one-timers here and there, but we expect many of those happening all along the year. Thank you, Alberto. The next question is from Peter Bauley from Bank of America. Thank you for the call. On the large year-over-year EBITDA growth in Europe, can you share roughly what percentage of each factor accounted for the growth? The mentioned factors are product mix, lower energy, commercial negotiations. How sustainable are those $17 per equivalent unit margins for Europe? Yes, we have already shared. We feel confident to sustain those levels of margins all along the year in Europe. Those are a combination of those three elements. Unfortunately, given the confidentiality on the commercial negotiation side, we cannot share too much details, but certainly, all of the above play a role in sustaining that result. Thank you, Alberto. Now we have a question from Iñigo Cossío from Capitalia, and it reads, "Can you give us more color on the expected time to achieve the 2x net debt to EBITDA targets? And we have seen weak results in the North America market during the last couple of quarters. What is your outlook for the rest of the year for this market? Yeah, thank you. Thank you, Iñigo. What we are targeting internally is to go back to this 2x leverage that we achieved seven years in a row before the pandemic. Certainly, we have full commitment from the entire team to go back to these levels. We're expecting that we could reach the 2x leverage in approximately between 18-24 months. Thank you, Armando. Now we have a question shared by Marcelo Motta from J.P. Morgan and Ariel Grignapini from Fintech Advisory. The question is related to the North American volumes during the first quarter since they were down 12% year-over-year versus the IHS growth expectation of 1.4% year-over-year. Well, certainly, the North America volumes, talking on the Nemak side, have been affected by the reduction on the EV component side. Those were expected to add, to contribute to our volume growth in North America, but as has been, I mean, all along indicated during the call, those volumes are, unfortunately, lower. So that has an effect together with a little bit of erosion of market share from our customers. Thank you, Alberto. The next question is from Agustín Bonasoda from PineBridge. "Can you please explain how we should think about the volume dynamic in Europe and the U.S. considering that Nemak's client production dropped in Europe but Nemak's volume increased in this region and vice versa in the U.S.? Should we see lower volumes in Europe and higher in the U.S. going forward? Well, on the volume side, and again, this is totally fluent given how the expectations are materializing on the EV front, but I think we should be seeing a similar behavior during the rest of the year, mainly a little bit of recovery in the North America side, and I would say that we should be seeing stability in the European side. But I would say that the dynamic, all in all, moves in the direction that we are seeing the industry behave. When you see differences on a particular quarter, sometimes it has to do with either inventory rebalances or some changes, talking about production, some changes on the, yeah, production schedules, particular to any particular customer in Europe. So we should be seeing a mix, but I think, all in all, the industry is well supported on the sales side, and that should continue to drive production. Thank you. Now we have a question from Carlos Manuel Santiago from BBVA México. "Which specific actions are you taking to mitigate what the rating agencies are observing in the last month? Yeah. Basically, we are having an open conversation with all the rating agencies every quarter and sometimes even more frequent. Basically, what we are trying to do is leverage the company. We are reducing our CapEx, trying to improve our performance so that we can improve our EBITDA as well as with some of the claims that we have related to inflation, related to undercapacity utilization. And we truly believe that once we start getting the support from customers plus the cost measures that we are taking, that we will improve our top line and also reduce our debt. And we are planning to generate cash flow this year and the following. Thank you, Armando. The next question is from Carolina Heyermann from LarrainVial. "Why did the cash and cash equivalents decrease this quarter, and also why did your cost of goods sold decrease? Yeah. As highlighted on the earlier part of the call, the working capital cycle requires investments on the first and the second quarter, and that essentially is what drove the decrease in cash. So that explains the increase in debt. And what was the second part of the question? The Cost of Goods Sold. Yeah. And the cost of goods sold, well, as you know, a big portion of our costs has to do with aluminum, and there have been price movements on aluminum on the downside. So whenever we see that reduction, we'll immediately translate into lower cost of goods sold and, at the same time, lower revenues. As you know, this is a pass-through to our customers. Thank you, Alberto. We have one last question on the web from Emilio Fuentes from GBM. "Hello. You mentioned the possibility of divesting assets that do not meet the thresholds of returns established. Could you give more color on set thresholds and other metrics for evaluating divestitures? Thank you. Yeah. Thank you, Emilio. Good question. Yes, we are evaluating, as we speak, some of our plants that are not getting the right returns on our invested capital. We have a serious conversation with customers that, in some instances, is that we have not been able to recover inflation, especially on the labor side. We're very serious. If we are not able to convince some of the customers to help us, we will divest some of these plants. At this point in time, we cannot give you any color in what are the plants that our customers are where these facilities are located. We need to have solid performance in all our plants. We are not prepared to subsidize any single customer, and we're determined to improve the financial performance of the company. That's our commitment, and we will make sure that we deliver. Thank you, Armando. We have received another question via telephone, so we will move to that one. Thank you. We have a follow-up question from Alejandro Azar with GBM. Please state your question. Thank you, Denise, for bringing me back. Just one more question, Alberto, and Armando, taking advantage of your time. We've seen in the past five years, a little bit more than that, your clients losing market share. What is Nemak doing internally to capture new clients, let's say, upcoming Chinese OEMs or Toyota, Honda? Are you seeing, let's say, these new OEMs interested, or especially Toyota, I mean, interested on your chassis applications? Because I understand they do their own internal combustion engines, but what color can you share on that front? Yeah. Alex, as we speak, we have already Chinese customers and Japanese customers as well. Toyota is one of them. It's our customer and very good customer, by the way. And certainly, we are open and in discussions with Chinese OEM. We have had already visitors looking at some of our facilities in different regions. And we are totally open. As I indicated, yes, they have attractive products. They have also good prices that are attractive to the general public. And we are doing our commercial effort with all OEMs. We are, again, looking for opportunities. I think, as you are indicating, on the chassis side, on the EV as well, we have opportunities, and certainly, we will continue doing our commercial effort to get different customers in addition to what we have today in our customer portfolio. Thank you, Armando. There are no further questions at this time. With that, we conclude today's event. I would just like to take this opportunity to thank everyone for participating. Please feel free to contact us if you have any follow-up questions or comments and have a good day. Thank you. Ladies and gentlemen, this does conclude today's earnings webcast. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.