Good morning. I'm Kristopher Doyle, Vice President, Investor Relations and Treasurer. Welcome to our Earnings Call for the Second Quarter of 2021. Please note this call is being recorded, and all lines have been placed on listen-only mode to prevent background noise. Before we begin this morning's call, I'd like to remind you this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to various factors, risks, and uncertainties that could cause our actual results to differ materially from those expressed in these statements. Please refer to the page entitled Forward-Looking Information for additional details. Presentation materials for today's call were posted on the investor section of Visteon's website this morning. Please visit investors.visteon.com to download the material if you have not already done so. Joining us today are Sachin Lawande, President and Chief Executive Officer, and Jerome Rouquet, Senior Vice President and Chief Financial Officer. We have scheduled the call for one hour, and we'll open the lines for your questions after Sachin's and Jerome's remarks. Please limit your questions to one question and one follow-up. Again, thank you for joining us. Now I'll turn the call over to Sachin. Thank you, Kris. Good morning, everyone, and thank you for joining our second quarter earnings call. Page two summarizes our results for the second quarter. Our sales were $610 million, up 59% year-over-year excluding currency, while the global vehicle production grew 49% in the same period. While demand from automakers was strong in the second quarter, semiconductor supply was impacted by multiple factors, including the Texas winter storm, the fire in the supplier's facility in Japan, and the outbreak of COVID-19 in Taiwan and Malaysia. Despite these challenges, the Visteon team did a great job in mitigating the impact to our customers while keeping costs in check. I'm pleased that the company continued to outperform the market in a challenging environment due to supply chain disruptions and the COVID-19 pandemic. I will discuss our sales performance more on the next page. Adjusted EBITDA was $30 million or 4.9% of sales, an increase of $33 million compared to prior year. Compared to the COVID-19 impacted second quarter of 2020, adjusted EBITDA improved due to a combination of higher volume, cost efficiency measures introduced in 2020, and engineering recoveries. While our profitability improved significantly versus last year, it was below our initial estimates for the quarter. This was due to the lower than expected sales driven by supply constraints and the slightly higher costs incurred due to open market purchases of critical semiconductor parts. The company's liquidity remains strong, and we ended the second quarter with $470 million of cash and debt of $355 million, representing a net cash position of $115 million. Our product portfolio for digital cockpit and electrification continues to do well in winning new business. I'm pleased to report that we achieved $3.2 billion in new business wins in the first half, returning to pre-pandemic levels of performance. We also launched seven new products in the second quarter and remain on track to deliver about 50 digital cockpit and electrification products for the full year. We believe that long-term business success and the creation of shareholder value are integrally dependent on building a more sustainable business. Recently, ISS rated Visteon in the top quartile in our peer group for our ESG performance. While we are pleased with the progress we have made, we have set more aggressive sustainability targets for the company to achieve by 2025. Turning to page three. This page shows Visteon's Q2 sales performance relative to global and Visteon customer vehicle production volumes. On a year-over-year basis, global vehicle production increased 49% as compared to the COVID-19 impacted second quarter of 2020, which was lower than many had expected at the beginning of the quarter. Automakers were forced to shut down plants or reduce shifts in response to widespread shortages of components caused by semiconductor supply shortages. On a year-over-year basis, Visteon's customers grew 55%, a positive customer mix of 6% this quarter compared to a negative mix of 11% in the first quarter. On a first half basis, customer mix was a negative headwind to our results. Our sales grew 59% year-over-year on a constant currency basis, outperforming the market by 10 percentage points and our customers' production by four percentage points. Our expectation for sales at the beginning of the quarter, based on semiconductor supply outlook, was a little higher at about $650 million, even though demand from OEMs was in excess of $800 million. Semiconductor supply was particularly constrained early in the second quarter due to the effects of the winter storm in Texas and the fire at a supplier's facility in Japan in Q1. We had to source some components on the open market to maintain supply continuity to our customers. Despite these constraints, our core digital cockpit products performed very well, with cluster sales growing 57% year-over-year. Infotainment sales grew 80+%, and displays grew more than 75%, as these products were less impacted by the semiconductor shortages as compared to clusters. The good news is that demand for our digital cockpit products remains strong, and as semiconductor supply recovers from the lows of the second quarter, I expect our market outperformance to continue and return to mid to high single digit or better. Turning to page four. The company launched seven new products in the second quarter, three of which are highlighted on this page. We launched our latest 3D cluster technology on the completely redesigned 3rd generation Peugeot 308. This cluster uses an innovative dual display technology to generate depth perception for 3D graphics for improved user experience and to bring high priority information, such as speed alerts and warnings, to the driver's attention. This business represents approximately $175 million in lifetime program revenue. Our Android-based infotainment system was launched on a new Škoda SUV, which is part of Volkswagen Group's ambitious India 2.0 project. The system offers a 10-inch touchscreen with localized connected infotainment content through an embedded app store, Bluetooth 5.0, wireless CarPlay, Android Auto, and other state-of-the-art infotainment features. This program is worth about $135 million in lifetime revenue. The third product highlighted on this page is for Geely in China. Geely is introducing our Android-based infotainment system in its newest high-end flagship SUV. This system uses latest Qualcomm Snapdragon chip to deliver infotainment content on two displays, on the central console and the passenger side, and also renders content on an augmented reality head-up display, providing drivers with access to road and navigation information without having to avert their gaze. The total lifetime program revenue is approximately $115 million. These products leverage the latest advances in hardware and software technologies to deliver an enhanced user experience that is key to the automakers' brands. It also illustrates very well Visteon's technology expertise and global product development capability. Turning to page five. New business activity was strong in the second quarter, despite the distraction caused by semiconductor shortages. We ended the first half with $3.2 billion in new business wins, which puts us on track to achieve our full year target of $6 billion. With $2.9 billion in the second half of 2020 and $3.2 billion in the first half of this year, our new business bookings are back at pre-pandemic run rate. In the second quarter, from a product perspective, digital clusters did very well, followed by displays. We also made progress on opportunities that will be awarded in the second half of this year. Our digital cockpit and electrification products are addressing the growth areas of the industry, and the pipeline of opportunities for new business is robust. For the first half, digital clusters represents almost half of the $3.2 billion of booked business. Android-based infotainment accounts for over a third. Displays make up the rest. Interest in our integrated cockpit controller technologies, SmartCore, continues to remain strong with 30% of the bookings for the first half powered by this technology. The timing of new business decisions tend to be lumpy, and the semiconductor supply situation may extend some of the upcoming decision timelines. Nonetheless, I feel confident that we'll be able to achieve our goal of $6 billion in new business wins for the full year. Turning to page six. This page highlights a couple of significant new business wins in the second quarter. The company was able to extend its digital cluster business with a large European OEM for an 8-inch digital cluster on multiple vehicle models. With this extension, the total business for this program is now worth $1.5 billion. With the product launching on 25 different vehicle models across three brands and in all regions of the world, this is probably the biggest digital cluster program in the industry. Beyond the revenue associated with this program, it also gives us the benefit of scale that we can bring to other customers for similar products. The second win highlighted on this page is for the two-wheeler market, where we were successful in making a breakthrough with a large OEM for a circular pod digital cluster. This is our first win with this OEM, and the system will offer turn-by-turn navigation and phone integration via Bluetooth in addition to traditional cluster features. Our business in the two-wheeler market has been steadily growing over the past two years, and with this win, we now have business with four OEMs and have our products in 35 different current and future models. Turning to page seven. Creating long-term shareholder value requires that our business operations are sustainable. As part of our drive for greater sustainability, we are committed to improving our emissions, social, and governance performance and practices across the company. Starting with our products and technologies, we are enabling our customers to achieve their environmental goals with solutions that not only enable electrification of the powertrain, but also reduce the weight and energy consumption of the electronic systems. We have already reduced Scope 1 and 2 greenhouse gas emissions in our operations by over 10% over the past five years, and have set aggressive goal of reducing them further by 25% by 2025. Although our operations are not water intensive, we will further reduce water consumption by 6%, as well as reduce waste and energy usage. Moreover, 50% of our energy used by 2025 will come from renewable sources. The company participates in the Carbon Disclosure Project to provide transparent reporting of its emissions data and carbon emissions reduction strategies. The company employs approximately 10,000 people from different backgrounds and experience across 18 countries. Diversity, equity, and inclusion are a key focus for the company. Gender diversity is an important part of this effort, and this year, we have launched a leadership development program to elevate more female leaders in the company. It's also important that we contribute to the societies in which we operate. I'm proud of our employees for responding to the many challenges the world is encountering, especially COVID-19, with various social outreach programs. I'm pleased to report that our efforts in building a sustainable business are being recognized. ISS recently upgraded our rating in their latest report that puts us in the top quartile of our industry peers in ESG performance. Turning to page eight. On this page, I would like to discuss our outlook for global vehicle production for the rest of the year and the key drivers of Visteon sales. Unlike any time in recent years, the outlook for vehicle production for the rest of the year will depend almost entirely on semiconductor supply. Demand remains strong as vehicle inventories globally have been depleted in the face of robust consumer demand. First half global vehicle production was 39 million units, representing a year-over-year increase of 29%. Our customers' production growth was lower, representing a negative customer mix of 6% for the first half, mainly driven by Ford. Visteon sales were up 34% in the first half, which, after excluding the positive effect of currency, represents an outperformance of seven percentage points versus our customers' production growth. As we have noted earlier, our outperformance would have been higher if the supply of semiconductors was greater, especially for clusters. Based on our discussions with automakers and semiconductor suppliers, our estimate for global vehicle production for the second half of the year is 41 million units, a decrease of 7% year-over-year. Our estimate for full year remains at the same level as before at approximately 80 million units, representing a year-over-year increase of 8%. We expect our customer mix to improve in the second half, but remain a headwind for the full year based on the negative mix experienced in the first half. Semiconductor supply is also expected to improve gradually starting midway in the third quarter and continuing into the fourth quarter. There is some indication that demand for semiconductors from other sectors of the industry is starting to slow down, which should help secure more supply for automotive. Also, our growth over market in the second half is expected to be in the mid to high single-digit% range, driven by both the level of semiconductor supply and the new product launches. Most of our new product launches this year are happening in the second half. Based on these considerations, we expect sales to come within our guidance range, but below the midpoint. Turning to page nine. In summary, the company performed well in a challenging environment that was impacted not only by COVID-19, but also semiconductor supply constraints. Our sales in second quarter grew 59% year-over-year, outperforming our customers by four percentage points and the general market by 10 percentage points. Our digital cockpit products such as digital clusters, infotainment, and large displays performed very well despite the challenging supply chain environment. Our technology portfolio is strong and aligns well with the key industry trends of connectivity, digitalization, and electrification. The pipeline of new business opportunities is strong, and we won $3.2 billion in new business for the first half that will continue to drive better than market performance going forward. Demand from automakers remains strong and semiconductor supply is expected to improve as we progress through the rest of the year. Our sales for the full year are expected to come within the guidance range. I will now hand it over to Jerome to review the financials. Thank you, Sachin. Good morning, everyone. As the industry rebounded from Q2 of last year, which represented the low point of industry production output during the COVID-19 pandemic, Visteon increased sales, expanded margins, and improved adjusted free cash flow compared to prior year. Visteon grew sales 59% year-over-year when excluding the favorable impact of currency, outperforming customer production volumes. Adjusted EBITDA improved to $30 million, representing a margin of 4.9%. Through the first half of the year, adjusted free cash flow was - $7 million. Q2 of 2021 had its own set of challenges, driven by constrained supply chain, with semiconductor shortages impacting the overall industry, and Visteon was no exception. In Q2, we experienced a significant reduction in parts from key suppliers, including NXP, as a result of damages incurred to their facility from the Texas winter storm, and Renesas, following a plant fire at their Nagoya factory in Japan. As previously discussed, we established a cross-functional global task force early in the year, which has been working around the clock to optimize supply and minimize the ongoing impact to our customer production schedules, as well as to our operations. The task force is in daily communication with our customers and suppliers to align on part availability and was able to provide additional products to our customers through open-market semiconductor purchases. This team has done an excellent job minimizing customer disruption while at the same time reducing the impact of fluctuating schedules on our own operational performance. This constrained environment, driven by supply, muted sales growth in the quarter. Overall demand for vehicles, as well as for Visteon's products, remained robust, with initial OEM orders representing an increase from Q1 sales levels. We anticipate that the second quarter represents the low point in supply availability, and that supply will steadily increase throughout the remainder of the year. Adjusted EBITDA margins were negatively impacted by lower scale and higher incremental costs associated with semiconductors and premium freight, while benefiting from higher engineering recoveries from our customers and savings from previous restructuring programs. Adjusted free cash flow was a slight outflow in the first half of the year, primarily driven by use of cash from working capital. This was partially offset by the continued discipline on capital expenditures. We continue to have one of the best balance sheets in the industry with a total cash balance of $470 million, a net cash position after debt of $115 million, and a negative net debt leverage ratio. For the full year, our outlook remains within our guidance range, but below the midpoint as sales continue to be impacted by supply chain disruptions and the incremental costs associated with the semiconductor shortages slightly exceeding our initial estimates. Turning to page 12. Sales in the second quarter of 2021 were $610 million, an increase of $239 million compared to prior year. In comparison, industry production volumes were up 49%, while production at our top customers was up 55%, representing a favorable customer mix on a year-over-year basis, primarily due to the uneven nature of OEM plant closures last year, early in the COVID-19 pandemic. Compared to our top customers, Visteon sales outperformed by approximately 4%. Adjusted EBITDA was $30 million, representing a margin of 4.9%, an increase compared to prior year of $33 million or 570 basis points. Compared to last year, adjusted EBITDA margins benefited from higher volumes, higher engineering recoveries from our customers, as well as from our cost reset in 2020. This was partially offset by supply chain cost impacts and the non-recurrence of temporary austerity measures that were implemented in 2020 and have since ended. Net incremental costs associated with the semiconductor shortages were approximately $17 million in the quarter. The majority of these costs resulted from higher purchase prices of semiconductors on the open market through brokers and distributors. In the second quarter, open-market purchases represented 2/3 of our total incremental cost related to supply shortages. The decision to utilize brokers and distributors was a proactive approach Visteon took to ensure we optimize deliveries to our customers. Compared to the first quarter, the quantity of semiconductors purchased through brokers and distributors decreased as supply reduced. Driven by high demand, incremental unit cost increased, resulting in higher costs for the company in Q2 versus Q1. Some of the incremental costs also included temporary surcharges from our Tier 2 suppliers, as well as higher freight and logistics costs. We are actively negotiating with our customers to pass along incremental cost, and our recovery rate has increased as the quarter progressed, while many OEMs are passing along price increases to customers. In total, incremental semiconductor costs impacted margins by approximately 280 basis points, while lower sales, compared to our recent run rate of approximately $750 million per quarter, reduced margins by a little more than 300 basis points. When normalizing for these two items and for the higher engineering recoveries, we estimate that margins would have been closer to 9.5%-10%, which is consistent with our normalized margins over the last few quarters. Turning to page 13. Page 13 provides an overview of our cash and net cash position at the end of the quarter, as well as our adjusted free cash flow for the first half of 2021. Our balance sheet continues to be one of the best in the industry, with a net cash position of $115 million and a net debt to last 12-month EBITDA ratio of - 0.5x, with no material debt maturities until 2024. Adjusted free cash flow for the first half was - $7 million, an improvement of $59 million versus prior year. Adjusted free cash flow benefited from higher adjusted EBITDA, as well as from our continued discipline in capital expenditures. Capital expenditures were down approximately 50% year-over-year, as the actions we implemented early last year continue to drive optimized levels of CapEx going forward. Working capital was an outflow for the first half, primarily driven by an increase in inventory levels. We have been building inventory to manage the variability of OEM production schedules, which will allow us to ramp up output as semiconductor supply increases. Turning to page 14. Based on the conversations with our suppliers and customers, we currently anticipate that sales, adjusted EBITDA, and adjusted free cash flow will all be within our guidance range, but below the midpoint. As a reminder, our full-year guidance is sales of $2.875 billion-$3.025 billion. Adjusted EBITDA of $230 million-$270 million, and adjusted free cash flow of $35 million-$65 million. In this supply-constrained environment, we expect production volumes to be down approximately 7% in the second half of 2021 compared to prior year. As Sachin mentioned, the industry got off a slow start in July, with multiple customers reducing production schedules to adjust to the ongoing supply chain shortages, exacerbated by the more recent COVID-19 outbreaks in Taiwan and Malaysia. We currently anticipate activity will pick up in the second half of the third quarter and continue to increase throughout the fourth quarter. In addition, Visteon is scheduled to launch a significant amount of new programs in the second half of the year. Based on these factors, we expect Q3 sales to be higher than Q2 sales in the mid-teens percent range. This would represent a reduction in sales for the third quarter compared to prior year, when supply was not constrained. We expect further improvement in Q4 sales, which we forecast to be slightly higher than sales in Q4 2020. Visibility continues to be limited, with additional risk stemming from the ongoing COVID-19 pandemic, which is creating additional disruptions around the world. On the cost side, we are currently expecting 2021 net incremental supply chain costs will be between $35 million and $40 million for the full year, which compares to $3 million-$4 million we incurred in 2020. This is up slightly from our original expectations. Cost pressures have increased as the shortages have lasted longer than many had anticipated. To mitigate these cost increases, we have been actively negotiating with both our suppliers and customers. As already stated, we began to see increased success in the negotiation with our customers towards the end of the second quarter and anticipate that we'll have more success as we progress throughout the year. Despite these near-term challenges, we remain optimistic about the long-term growth prospects for the business. We continue to win a significant amount of new business and launch a high number of new programs, with 2021 representing another year of approximately 50 program launches. We believe that there is a significant amount of pent-up demand that will help accelerate industry production growth for years to come, including the continued demand from retail customers, the return of fleet demand, and historically low inventory levels in the U.S. and Europe. The situation continues to be fluid, with forecasts from both our suppliers and our customers changing on a weekly basis. However, we believe that the near-term challenges are transitory, and we remain optimistic about the future growth trajectory for Visteon. Turning to page 15. Visteon's compelling investment thesis remains intact. We continue to see the acceleration in key industry trends, including digitalization, connectivity, and electrification. Visteon's product portfolio is well-positioned to support these key trends. Thank you for your time today and your interest in Visteon. I would like now to open the call for your questions. At this time, if you would like to ask an audio question, please press star then the number one on your telephone keypad. Again, that's star and the number one. We will pause for just a moment to compile the Q&A roster. Your first question comes from Luke Junk with Baird. Good morning. Thanks for taking the question. Wanted to ask about your outlook for the third quarter sequentially. Thanks for that color, and what I'm wondering is if you could expand on the visibility into your own supply chain in terms of semiconductor availability and related components, and specifically whether you're seeing any easing here in July at all as Renesas and those Texas facilities come back online, for example, and to what extent are your insights into your own supply chain informing your view on production as well? Thank you. Very good, Luke. First of all, what I would say is, in the second quarter, we had a really challenging supply situation, intermittent supplies that impacted our operations as well as our customers. We buy hundreds of unique semiconductor parts, and all it takes is one part for us not to be able to build a full product. We pay a lot of attention to the supply plans from our key suppliers. We have a good visibility, I would say, into the third quarter, and at least with the larger suppliers, also into the fourth quarter. One thing to note is that the semiconductor supply, this issue that we have faced with shortages, has shifted in its nature. Earlier on into the first quarter and in the second, it was more about having enough wafer starts. That has now shifted, and some of the constraints are actually now in the backend processing of our assembly and test. Late in the second quarter, there were some issues in terms of outbreak of COVID-19 in places like Taiwan and Malaysia impacted supply. Those issues have lingered and has impacted us in July. July is going to be a slow start for us in the industry, and we expect that to then recover from there. Given that, we feel that we will continue to see improvements in supply in the third quarter and then continue into the fourth quarter. Okay, great. That's a really helpful color. Thanks. Thank you for that. My follow-up question is for Jerome, a modeling question, just hoping to get your updated view on net engineering costs for the full year, including how we should think about engineering recoveries in the back half of the year, given the uptick that you saw here in the second quarter. Thank you. Sure. Good morning, Luke. Our net engineering, as a percentage of sale, has been a little bit lower than our run rate for the first half of the year. We've been running at 7.8%, and we've always talked about being close to 8% for the full year. That means we'll see a little bit of an uptick in the second half of the year. The benefits that we got in the first half were largely related in Q2 to better engineering recoveries that we've been focusing on. Overall, for the second half, you'll see a percentage increasing slightly to be close to 8% for the full year, which means that in dollar terms, we'll see an uptick sequentially from 1H- H2. Most of that engineering as well cost is going to be, if I could add, related to launch costs that we'll have, launch programs that we'll have, as well as new business that we are winning, which requires additional engineering. Think about it for the full year, close to 8%. Okay, thank you. I'll leave it there. Thank you. Your next question is from Shreyas Patil with Wolfe Research. Hey, thanks a lot. This is Shreyas on for Rod. Just following up on that last question. You've talked about 8% engineering cost as a percent of revenue. You are obviously launching more business as you get out to 2022 and 2023. There would be presumably launch costs associated with those programs. Should we still be thinking about that 8% target as sustainable even as your new business activity accelerates? Yes. First of all, that's a great question, Shreyas. The answer is yes, because one of the things that we have done very successfully is we've shifted more and more to a platform approach of developing these new products. We're able to leverage the platforms more effectively. We have moved away from building products custom for each OEM, like what we used to do in the past. We should be able to achieve that level of engineering spend even with our new business wins returning to the pre-pandemic levels. What I would add is going into 2022, again, we'll have probably a slight increase in dollar terms, but again, our percentages are expected to be below the 8% going into 2022 and even into 2023. Okay. Then just also on, you've talked about in the past, it seems like you're starting to SmartCore, you're gaining some wins there, and you mentioned it's about 30% of your first half new business wins. Can you talk about what you're seeing from the OEM perspective? Are they looking to increasingly consolidate the cockpit domain? What role are they looking to play as that domain is being consolidated? Are they looking to go more downstream towards middleware and app development? Are they still kind of just looking to basically purchase that from the supply chain? Right. As the car becomes more and more software driven, the move towards having more integrated, more capable computers that are running more software that is also capable of being upgraded over the air is really where the industry is headed. SmartCore, as we've talked about before, is our platform technology that enables you to integrate different components, whether it is the cluster, infotainment, and eventually also ADAS, in a manner that preserves all of the requirements of automotive, which are pretty stringent in some of these specific applications. These lower level capabilities are not something that you can hope to develop shortly, if you want to bring that in-house. That's not what we see the OEMs wanting to do. Where they will have a role to play is in some of the applications and the user experience that they want to deliver inside the cockpit. The how, in terms of the technology, is what the suppliers are best suited to deliver. We believe that the shift and the transformation that's occurring with the move towards more software-driven approaches is really what's going to continue to drive our SmartCore business here in terms of being a greater share of the new business wins going forward. Okay, thanks a lot. Your next question comes from Brian Johnson with Barclays. Yes. Thank you. Can you hear me? Yes, Brian, go ahead. Good morning, Brian. I just want to drill in a bit on gross margins, and obviously there's lots of puts and takes with the chip shortage. If you add back the extra engineering expense, and some of the one-time things, you're still getting kind of number, I think, I could say kind of 15-ish%. That's a little, yeah, we'll get you to 16%. You used to run 18% last year. You were in the low 20s before it. Just want some way of thinking about gross margin on kind of a normalized basis. Yeah, no, it's a good question. In fact, it's pretty simple. It's really all about scale and all about the semiconductor cost, incremental cost that we're getting. I think we've talked about the semiconductors, 280 basis points for the quarter, and we should go into a little bit more detail, I'll come back into that. The scale is as well, maybe a piece that we forget sometime. With $610 million in sales, you're losing a lot of scale. We've got a structure which is essentially set up for $3 billion+. That's how we set it up last year when we spent a lot of time reorganizing and restructuring the business. If you do simple math and add $140 million in sales at essentially a low to mid 20% margin rate, you get more than 300 basis points extra in the quarter. Scale represented about 300 basis points as a minimum, and then semiconductor, 280 basis points. The two add up to almost 600 basis point that we've lost because of the semiconductor supply and as well the semiconductor cost. These comments are valid at EBITDA level. They are very similar at margin level, and at margin level, obviously you don't have the SG&A, but you do have depreciation, for example, which is backed out of depreciation. It's fairly simple. It's all about scale and semiconductor costs. Great. A more strategic question. We took a group around the Chicago Auto Show, the first in-person one in quite a while, and we're just struck by the profusion of dual screen, kind of smooth curve digital clusters. Can you give us a sense of, as you look at your backlog, as you look at your quoting opportunities, one, how big an opportunity is that? Two, is it better business than if you just do into either individually the digital cluster or the center screen? Three, even if you don't get the SmartCore on those systems, is that still a high margin opportunity set? Yeah, that's a very good question, Brian. If you think about what that implies, this larger, multi-display integrated panels that you're now seeing in cars, it also means that the underlying electronics that's driving those need to be then separated from the display itself. The systems of the past, including some of the digital clusters that we have talked about here on the calls, are integrated with the electronics and the display attached to each other. We are seeing a separation of that as the displays get larger. Because of that, as the display resolution increases, the number of displays also go up, the complexity and therefore content in the electronics that's driving those displays is also going higher. It's actually an increase in content driven by complexity across the display itself, but also in the electronics. We have worked very hard at Visteon to position the company to take advantage of both these trends. We believe we have one of the better displays design and engineering capabilities in the company. We've talked about some of the wins that we've had recently, including in the last quarter. We see these trends continue. However, there's a certain incremental cost associated with that not all of the car models and segments will be able to afford. We see a sort of a bifurcation of the business going forward, where we will still see this standalone integrated digital clusters, which is very well represented by the way this quarter in the win that we talked about, which is a very large win. It's an integrated 8-inch cluster with the electronics attached, and this is going to last for a number of years. That will deliver at a price point that this integrated larger systems will simply not be able to achieve for the foreseeable future. We see that bifurcation. I think this is really good for the company, and it means certainly an increase in ASPs, especially for those integrated larger displays and SmartCore type of products. Just a quick follow-on. We did see the Grand Wagoneer, I don't know if that's your program or not, but include extra touch screens for seat and body controls. Is that a trend you're seeing and that Visteon is participating in? Exactly. One of the wins that we talked about, that's actually launched, not a win, with Geely, actually has three displays plus an augmented reality head-up display. The third display is exactly a control display with a touch screen that replaces all of the hard buttons of the past. That's powered by, again, a SmartCore type of a product, more so than independent discrete electronic systems. Okay, thanks. Your next question is from Emmanuel Rosner with Deutsche Bank. Hi, good morning, everybody. Hi, Emmanuel. Good morning. Hi, good morning. I wanted to drill down a little bit more on what exactly is playing out a little bit worse than expected on, in your full-year outlook. In particular, on the top line, you're still assuming 8% LVP growth. The growth over market is still guided mid to high single digit. I guess, what is exactly hurting sort of the revenue to a certain extent? Just a little bit more clarity also on at the margin level, anything beyond the semiconductor cost. Emmanuel, what I would say is, nothing has fundamentally changed in our perspective on the industry other than that we are living in a semiconductor supply-constrained environment. What we see here in the second half is that the supply of semiconductors is going to improve across the board, but it may not be a very even improvement across all of the hundreds of unique parts that we build. The reason for that is that the various sub-suppliers have different supply chains, with fab suppliers, their outsourced assembly and test suppliers that are all impacted by the same things that you're hearing about, whether it is excess demand or impacts of COVID, et cetera. What we expect is a gradual improvement, Q2- Q3, of supply of semiconductors, and we expect that double-digit improvement to continue into Q4 from Q3 levels. Depending upon exactly how that will play out, that will drive our market outperformance. In the second quarter, some of our clusters were impacted more than the other products. We expect that to improve, but depending upon the level of improvement, that's going to drive our market outperformance. Our assumption for our sales for second half assumes that it's going to be an improvement over the first half, in general for the industry, at about 3%-4% in terms of sequential second half to first half volume improvement. A more positive customer mix in the second half for Visteon as compared to the first half. That's going to drive our overall sales within the range that we have discussed earlier in our commentary between the midpoint and the low end of the range that we had already provided. Maybe yes, on the margin side, elaborating on Sachin's comment. Sales will be, for the second half, slightly higher than $1.5 billion. We are coming back to the scale levels that we've had essentially in Q3, Q4 of last year, and even in Q1 of this year. With this, back to my previous comment, we are back to 9.5%-10% margin, which is our run rate, which we've demonstrated on a normalized basis in the last few quarters. The only thing to remove from that is essentially still the leakage that we'll have on incremental supply chain cost, and we're expecting this to be close to 60 basis points for the second half of the year. That's to be removed from our 9.5%-10% run rate that we'll see for the second half. Okay, that's helpful. When you think that's to be removed, you mean this will. We'll be. It will reduce our run rate. Exactly, yes. Okay, great. Then I guess, same question, I guess looking forward to potentially past this year. When would you expect, based on growth of a market, to trend back towards your midterm framework of maybe in the low double digits. Then on the supply chain costs, do you foresee any risk that some of those could actually spill and continue into next year, either in terms of availability to support production or in terms of continued cost inflation that could maybe make it into the contract— Yeah. —cost of some of the components you buy? If you look at our market outperformance, growth over market, we had a very good year last year in terms of the number of new product launches, and we have a similar level of new products that we're going to launch this year. That's working as per our earlier indicated plans, and that's going to drive market outperformance, provided we are able to get enough semiconductors to meet the demand. The demand, by the way, even when you look ahead into 2022, although the initial information from our customers should be treated just that it's initial data, is very positive. It's higher than what we would have initially expected. There's no doubt that the trends we're talking about, digital clusters, infotainment, larger displays, et cetera, are continuing, and are in fact, picking up momentum. If we can get an improvement next year in supply over this year, which we fully expect, and all of our discussions with our suppliers points to that being the case, we expect our growth over market to return to the high single-digit level for next year. If it improves even more than what we currently believe, then it might even go into double digits. We are not going to be limited by demand. We will still be driven more by the level of supply we can get. As far as the supply is concerned, I think it's really important to understand that 2021, from a semiconductor demand perspective, was a confluence of a few factors that caused the year-over-year growth in the demand to be significantly higher. If you look at the historical performance of the semiconductor industry, growth is somewhere around 5% CAGR. This year, 2021, it's going to be more than twice that. Automotive semiconductor demand is going to be a healthy 20%-25% growth. Next year, many of the other industries' growth expectations are moderating, and even automotive year-over-year is not going to have another 25% growth year next year. All of these things point to maybe some of these constraints that we currently have, perhaps lingering into the first half of next year, but then dissipating as more supply comes on board. I'm sure you have read about more wafers being provided to the semiconductor industry, more capacity investments being made into the back end. All of that's going to come into play, and we expect that by the second half, the industry to return to more of an equilibrium between demand and supply. I would add maybe— [inaudible] —on the cost side, it follows essentially the same pattern. The cost increases that we see are largely driven by this imbalance between supply and demand. We still expect to see some level of leakage from a cost standpoint in the first half of next year. As supply and demand gets rebalanced, this should ease. If it doesn't, we'll go back to the drawing board, which is essentially look at our business equation, pricing to customers, purchase price improvement from our suppliers, and as well, VA/VE activities on the manufacturing side. Great. Thanks for all the detail. Welcome. The next question is from Colin Langan with Wells Fargo. Oh, great. Thanks for taking my questions. Just first, more of just a clarification. The outlook has $35 million-$40 million in supply chain costs. I think you touched on it a little bit ago, but can you remind us what it was? I think it was like $14 million in Q1. I think the 280 basis points is around $17 million in Q2, so that means there's just a small impact left, and then maybe by Q4, all these costs are passed. Is that the right way to think about it? That is correct. $14 million in Q1, $17 in the second quarter. I think what's really important to understand is what is in the nature of these costs. Most of them, in fact, two-thirds of these costs were related to spot buys that we had to make largely at the end of Q1 and at the beginning of Q2, as we were essentially trying to bridge the supply that was impacted by the winter storm in Texas as well as the Renesas fire. A lot of these costs were related to open market purchases that we've made to bridge that supply. We've seen a fairly significant decrease of these costs as we went into the later part of Q2, and as we were getting a better supply. It's still obviously constrained by COVID outbreaks in Malaysia and Taiwan, but the costs have gone a little bit better in June, and we've seen that as well in July. At the same time, we've been more and more successful negotiating recoveries with our customers. One way to think about it for Q2 is that about 85% of our costs in Q2 were incurred in April and May. That means that June was much lower, and we've seen some further improvement in July already as well. We are very confident that we'll be able to reduce these net costs for the corporation as we go forward. We've incurred so far $31 million in costs, and we are planning to be at $35 million-$40 million net for the full year, which implies, to your point, $9 million at the high end of the range for the rest of the year. Got it. Just remind me about the BMS win. Is that launching in the second half of the year? How should we think about that from a cost to margin perspective? Should we anticipate some higher launch costs as that hits? Can that get to the 12% EBITDA margin you're targeting long term, given that, I guess the first platforms probably don't have the same scale? Exactly. It's going to launch in this second half. As these launches tend to be, as you've just mentioned, the volumes initially are going to be low and will ramp up as we go forward. As we project the volumes and our ability to drive costs lower from the initial launch costs, we believe that we will be able to drive this to a 12% margin business going forward, yes. Got it. All right. Thanks for taking my question. Thank you. Your next question is from Michael Filatov with Berenberg Capital Markets. Hi, guys. Thanks for taking my question. I guess just to harp on the margin stuff a little bit more. Just thinking about it, you previously said 20% normalized incremental margins for the business. Let's say we add on sort of that $35 million-$40 million in supply chain costs, we take the low end of the midpoint of your prior guidance, and it seems to imply maybe roughly 8% EBITDA margins, maybe even a little bit lower. Does that sound right, or is there some sort of upside to the normalized incremental margin from some of the cost-saving initiatives you guys have undertaken recently? Hi, Michael. No, absolutely, that's the right way to think about it. Another way to think about it is, elaborating on what I was saying earlier, the fact that we are, for H2, back to more normalized levels, from a sales standpoint, and therefore more to a normalized level of EBITDA margin, 9.5%-10%, to which you deduct the 60 basis points for supply chain cost. The one thing to note, it was highlighted earlier on in the call, is the fact that engineering costs will be probably slightly higher than 8%, 8.1%, maybe 8.2%. Not a huge change versus the full year, but the dollar amount will obviously go up as sales go up. Okay, understood. Then just around the details of the supply chain costs, 2/3 of that spot buy, I guess, what's the reason for the increase aside from purely just extended disruptions? These temporary surcharges, what visibility do you have to those going away, I guess, in the back half of the year? First of all, in terms of the increase, we actually had the number of parts in the second quarter decrease in terms of what was available in the market, but the prices were higher. We were paying a higher premium on the open market purchases in the second quarter as compared to the first. That is in line with what Jerome just mentioned. We see that diminishing as we go forward. On the surcharges, the temporary increases that we are discussing with some of the suppliers, we do expect that we will recover most of that from our customers as we go forward here. Got it. Yeah, I guess. Sorry, go ahead. If you look at our 280 basis point incurred in Q2, about 200 basis point is spot buy related. 80 is essentially premium freight and surcharges, and it's pretty evenly split between the two. I think once you remove the spot buys, and we are probably a bit more impacted than other Tier 1 just because of the nature of our business, 80 basis point, I think is within ballpark to what other Tier 1s have been showing out there. Got it. Thank you very much. Thank you. Your final question comes from Jeff Osborne with Cowen and Company. Yeah, good morning. Just a couple questions on my end on the semiconductor side, which we've talked a lot about, but I was curious on the SmartCore product, if you've been able to redesign, if you had, let's say, MBUX being Renesas based, if you've been able to design in NVIDIA or Qualcomm to mitigate some of the challenges? Right. We actually have already two different suppliers for SmartCore. We have Renesas and Qualcomm. We're shipping on both. We have the ability to switch between those two, and we continue to look for additional suppliers, such as Samsung, to make sure that we are not single sourced or limited by supply. Having said that, virtually all suppliers in the semiconductor space have supply constraints. Yes, it is an ability for us to manage, but fundamentally, things have to get better in terms of supply for the industry to get into an equilibrium, which we do expect in the coming quarters here. Got it. Just very quickly, I believe Jerome mentioned that the spot buys have lower quality. Is there any risk to warranty reserves in the second half because of that? Oh, lower quantity. Quantity. I thought you said quality. My mistake. Yeah. Thanks for the clarification. Thank you. That's all I had for me. Thank you. Great. Thanks. This concludes our earnings call for the second quarter of 2021. Thank you everyone for participating in today's call and your ongoing interest in Visteon. If you have any follow-up questions, please contact me directly. Thank you. This concludes Visteon's Second Quarter 2021 Earnings Call. You may now disconnect.