SUP Superior Industries International

Troy Ford VP, Treasury & Corporate Development
Majdi Abulaban President & CEO
Matti Masanovich EVP & CFO
Chris Van Horn B. Riley FBR
Richard Phelan Deutsche Bank
Stephanie Vincent JP Morgan
Glenn Chin Buckingham Research
Call transcript
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Good day, and welcome to the Superior Industries' Fourth Quarter and Year-End 2019 Earnings Conference Call.

I would now like to turn today's conference over to Troy Ford. Please go ahead, sir.

Troy Ford

Thank you. Good morning, everyone and welcome to our fourth quarter and full-year 2019 earnings call.

Superior's we with referring available the Investor section today, presentation, our on discussion Relations along which, earnings of our will to be earnings the During website. release are Majdi This morning, Matti our Vice Executive our and and CEO; Masanovich, CFO. Abulaban, President I'm and President by joined

of would statements full of Safe today current XXXX. Company's statements Private and I this Harbor to discussion Form contained SEC the and Before Slide I Please a presentation the Harbor forward-looking are everyone Act the report annual remind or refer over this call to risk turn on X subject presentation to in the to factors. for Company's for that the complete XX-K provisions Safe Majdi, commented Reform filings, on the Litigation to like any including Securities forward-looking more statement of of

sales measures most items found We including GAAP. appendix today, US will EBITDA. the value-added with the accordance these are of Reconciliations measures can certain GAAP presentation. adjusted comparable in discuss of impact US of non-GAAP measures non-GAAP also and this calculated in the to and directly These not therefore be measures exclude

to will Majdi. I call turn that, the With over

Majdi Abulaban

Thanks, us full-year our you fourth good results. everyone quarter for Troy, and today and thank and morning, joining to review

strategic progress our I and me XXXX. provide Let towards for strategy highlights And you this begin moving by outline, taking will our then full-year. year's into update the fourth quarter finally, you the forward through an I'll on priorities.

the larger finishes. year continued demand to our of wheels, more Slide an on presentation results. to secular overview premium XXXX, for fuel for full X customer efficient begin In I’ll trends and we provide benefit from earnings of the

our our full in as a when We also provider, year. a customers enhancing in advancing and the was wheel premium our X% production the position. quarter, fourth to volume XX% XXXX very perspective, and from main down portfolio position challenging competitive solution continue ourselves

Now strategic made significant progress despite our we the on priorities. production declines,

product X% execute Our of XX% larger, in added increase wins global to actually for prior and over supported to a teams the increase Further we XX as XXXX than continue more fundamentally shift our versus accounted key our enable towards This the commitment inches growth mix wheels X% on flow premium shifted At portfolio. and wheel debt complex result of top That's our year. wheels, over on volume. in of generating value more strategy, launches market per sales and our added cash delivering a greater value our year XX% priority in a despite is profitability reduction. improving year. weaker the to sales, positive portfolio

cash we As debt future. as million. reduce of record $XX a from us operations these positioning delivered for by result flow enabling net million, towards move to efforts, XXX success tremendous A Superior of we the

our last to and realignment discussed we costs we initiatives cost enhance in reduction operational will that on our production laser are of focused our manufacturing and efficiency. quarter, structural additional This includes match overall identifying As footprint lower further volumes. optimizing structure

unit We actions less say we bearing volumes million to Despite XXX are fruit. sales, X% volume. EBITDA pleased lower delivered on are of that these in

disciplined executing we our to expenditures. earnings, we a committed production approach while working cash profitability remain capital expect through and XXXX, softening capital flow to to Looking book, environment, effectively driving order a enhancing and

X. Slide Moving on to

as to winning executing the mentioned, strategy I we offering marketplace. provider, and our wheel As a differentiated on solution electrification are in premium technologies

multiple electrical launched wheels and won on recently vehicle we platforms. example, For

actually price exciting printing as allows across the technology action leverages QX, colors is to we the pad unique us that a the a is design fourth During vehicle. Mercedes and quarter, put also element our This for capabilities premium wheel this very way, technology which an and on by launched the EQC the which wheel. known

we're electric with our coming and launching a EVs. Right on These newly excited Detroit relevance of exciting platforms announced Valley OEM a a in OEM our with highlight applications EV and new a on the Silicon highlights in recent win our years, space. in partnership technology win the as specializing platform pre chart of about Next, portfolio. well as expansion the side

firsts launch, and the process, including and well the across you firsts patented here mid for of the carries weight iconic technology, the reduce our as great of of example spoke. just This a laser name some the inscription and etching enabling engine of as polling products XXXX the The side Now complete see handling a process first some represents industry both flow technologies, Corvette for vehicle. also improve is quarterback spectrum the Superior. our the

those of who really it's you haven't it, For quite seen impressive.

One you the first, that has case, in this not we capture this ever inch is chart technology more the exciting overall. is time XX used first enabled This of our forming Audi Another to offering emerging Toyota this has see in. our our launched Toyota. wheel, first market application segment first have customer, they forming pro on played at an pro

alternative announce am launched officially provides to commercialized chrome. and to I that finish that, our more sustainable a a premium environmentally we and Finally, PVD pleased process, competitive

on road F-XXX. Our Ford the today. actually the PVD technology is on It's

team are of of technical and very, customers and very the making market. We We technology's bringing our progress technology. to -- all see proud were this are this validation to with team data executing the for further customers related to other and expand and to this the reach excited the really technology working closely for on good the this proud capability coming

on and like which low The way cost. near-term our also now our operational Slide mentioned cash enhancing on improve provide in last the so would that I the PVD, talent mid are With expenses execution, optimizing update XXX% commercializing these and to year, actions which American to on and we like focused mind, tremendous of X. an at reducing underlying improving support priorities portfolio, progress footprint, only far, goals to growth I that Moving products is made EBITDA flow. not North new but efficiency. by

our the pleased in annual force reduction with are XX% Additionally, year-on-year. Mexican by turnover of we labor

from margin expect our to we these American and between North operation. the initiatives Now, operations of a many gap margin European standpoint, narrow

Further, think launching call spoke the European last OEMs critical. in we core as Especially greater. and particular inches in earnings in portfolio our here strategy, the XX. now our category you is wheels with in absolutely shift in or is it's million operations mix our given next to as actually X portfolio of adding one-third our of to Mexican that the XX We're Mexico

excited our previously. tell manufacturing to has now Mexico we're OEMs would I the we its finally Mexican that priority and and This discussed and as to U.S. premium in wheels are shipping you So, very a operations core there America, are European in North now our we in that we're growth been pleased and strategy

X. Moving now to on slide

flow long-term see items, journey company foundational cash This EBITDA on differentiated our same for creation value will is these executing You shareholders. customer that a relationships, value where as to maintaining portfolio remain generation, towards the on product I growth, the roadmap. creating our as our well see

to focused such as the of on Here lines launches, and cost our product now, our PVD current aligning portfolio the operating environment. fixing current we're

portfolio. enhancing operations, the be to the commercial will manufacturing continue and winning reducing discipline, we driving cost As move our balance focus forward, across

and deliver to value us improvements. these initiatives shareholders the position enhancements can where medium-term we of EBITDA revenue for through All

the made year, to much quarter to is To progress be great while date, summarize the still and we work there done. have

activities We margin progress that our However, enhancing to about a for expect performance. the outlook you business, see when XXXX positioning through excited takes we the that to-date. remain differentiated you will executed already potential Matti that through this the and our leader will of start the financial we've as technology show

the our let provide financial quarter. Matti to the for over call me results full on turn year to Matti? and that, With the fourth details

Matti Masanovich

value per full added on added to to markets lower wheels. of Slide growth the larger results Value X% representing for growth shift Majdi. declined excluding sales sales FX. over broader value our sales the sales our volume, Thanks, a and due added company's seven, content value wheel X% and outperformed X% Turn higher X% XXXX market towards Added year

America by and North was down over volumes which Conversely, representing sales volumes the larger substantial strike, wheels. added premium In impacted industry added including the grew sales per value growth offset to were value market value lower negatively added grew X% region production was shift by Europe UAW sales a X% in X%. partially or of the impact wheel in

to greater our approximately XX% As for Majdi XXXX. XX noted compared portfolio inch wheels in in XX% XXXX approximately and accounted of

to region breakdown the of quarter sales added as net reflects and XXXX, year period. by for the the eight, unit value prior year sales and full Slide fourth compared shipments,

in units X.X mentioned, fourth million X.X share the our million the to wheel As to quarter, units prior decreased Majdi compared in year. units

XX units more The complex the by to focus XXXX, global customers volume, and units prior in lower million the industry to reduced driven key the decrease year. was and the on our to year XX.X million larger, share For the production full decreased in wheels. decline at shipment production wheel shipments due compared

diluted of million earnings net $X.XX or fourth For million period. a a to the net of share, per or $XX $X per $X.XX of share the quarter, income reported of we loss loss year prior in diluted compared

our our which over to production European a loss impacted and shipments non carrying a compared intangible of Our the our to charge the impacted the plan, of plan charge. in fair and the in fourth in long was adversely cash XXXX prior expectations, value fourth the cash 'XX to our volumes resulting range impairment asset business unit. net fair of related The value unit quarter forecasted was million due in long estimated non goodwill cash value lower of EBITDA year of range quarter by flow $XXX reduction business in adjusted and industry as completed excess

anticipate forward an from today current reflects the business impairment the strong of outlook. out outlook adjustment unit still we performance the going our compared to European goodwill prior While to

a of $X.XX earnings prior XXXX, diluted million year the compared of $XX to reported For or loss $X.XX million $XX net a of share loss per full cents share, income in of per diluted period. or we

other net the diluted Please of see The during income on we EPS. due In from earnings and the and goodwill million, the appendix to per impairment, is in the restructuring net and and acquisition of production for the addition $XX to to XXXX. restructuring rationalization items these facility of diluted $X.XX. of on primarily tangible impact expense diluted the table impact our had reconciliation other items EPS share total

investments fourth of an in benefit on tax of loss The the income quarter for of provision the on $XX our to million was was additional pre The of the period. tax a the million Based to prior million provision under income earnings the $X $XXX in foreign $X reform pre post compared effect tax benefit on generation million Poland. quarter tax tax primarily tax tax income credits. taxation for on of of the due US and

to post tax for for credits. of Income provision compared on quarter, tax XXXX to the US the reform a of to $XX declined of year on million, $X as XXXX earnings provisions the provisions Similar the to in XXXX results generation full prior from $X $X million tax of due Cash income the pre the taxes tax million. foreign tax fourth taxation the provision was company effects additional an and the million the under were full of $X million compared million for XXXX of to 'XX. income tax $XX of in the year pretax of year loss

to taxes. continue on planning strategies work We minimize tax to

the and our through strike higher driven XXXX. value-added in you partially as by to The decrease quarter walk was change decreased weakened in million, the period. me year let sales lower euro to compared sales $XXX year-over-year UAW sales fourth production net of the for million $XXX X, prior Value-added slide by labor including content the wheels. as well volumes On offset

in mentioned costs with earlier, XX, volumes peso to was the On EBITDA decrease of was these for EBITDA The managed and period. driven rates. lower as successfully by, Mexican the offset headwinds, quarter including I production partially production million which Despite to was levels. by the compared million the the prior favorable weakened XXXX, company euro, slide primarily fourth strike in year UAW adjusted adjusted $XX align labor $XX

flat reference, fourth the For prior quarter sales, year period. $XX to million compared net SG&A the for XXXX of was or expense of X%

in weaker by XXXX XXXX. $XX were value-added million driven was $XXX lower million, to billion to compared $XXX year to Net impact and billion which reduction $X.X sales in The Moving volumes euro, results. the XX, had impact the million. a of primarily which negative was sales compared of a year for on and more value-added for slide XXXX full in our sales detail $X.X year, the provides sales

adjusted or by integration prior Turn offset to EBITDA in compared regions. of $XX decreased comprised million decrease to and X% sales one year wheels, driven primarily higher decrease as premium prior year period. to larger million full and was sales, in for million a in percentage The period. percentage adjusted partially year both lower to expenses the inefficiencies, SG&A product in by of for Adjusted our alignment volumes, improved slide reporting procurement acquisition XX. EBITDA the for by XX.X%. was the million compared XXXX, EBITDA The primarily to due more the value-added SG&A $XXX $XX XXXX costs in net the were full diameter full savings. of of is and and $XXX plant of energy content reduction mix of expenses In XXXX, point

management Net flow compared are prior structure in factoring supply and chain million of and extended operating cash cash receivable $XXX due capital $XX suppliers, by improvement working XX. EBITDA from favorable management, $XXX million to accounts in the net year full was global inventory payment period, including and capital the the to the initiation of addressed lower of team. activities adjusted flow prior terms operating program slide was our primarily on Our cash driven despite year, in million, the

was million period. prior to XXXX versus for a year in year the year prior Net for $XX XXXX, for full Capital the activities expenditures cash compared were million the $XX $XX period. $XX investing million in used full million

capabilities towards future and activities, maintaining returning differentiated including expenditures the and product platforms support investing facilities and directed highest XXXX, During and equipment technologies our our to capital our in portfolio. we customers' a

allowing common in $XX to reallocate a company dividend, annually. quarterly the As reminder, approximately Superior third its quarter, suspended the million

Europe paid face of market during $XX the will is in its notes common unsecured due to of invest The of a the net repurchase the and be debt senior At Superior of tax on notes we million. $XX for suspension used arrive or million $X the reduce purchases open in unsecured Also dividends had approximately $XX million, totaled and million to Dividends total in full the from is repurchased $XX to end ownership minority net business holders included adjusted million of $X.X cash EBITDA. which year of pre million for without gain minority X% value approximately other year, $X resulting that of million, Superior in has the the during the full and the is of Industries resulted X.X% million year. income outstanding. year at the The deducted been reduction senior $XX another repurchased, payments total deference debt.

credit of liquidity. our debt prior cash the we million year, with €XX terms There facilities. In facility with million to net our and The term $XXX our European the remain borrowing $XX million. of summary, million other available near the year of revolving position facility no increased ended of XXXX, lower credit are than available of credit was $XXX European All unchanged. January under debt. availability availability million €XX and funded includes XX, credit, the maturities limit our By from

incremental We under availability also accounts factoring receivable have programs.

the the year, the year leverage X.X of end approximately As our X.X period. times was turns of full from net down prior

have substantially we flow compared position detailed flow pay see cash as to years more to Slide is while where over past on overtime XX, and significantly that debt you can the cash liquidity Our in our further liquidity available XXXX. progression two XXXX generating increased free

XXXX. our to I'll on Now Slide outlook move XX, for

seeing, time, units. industry we year the impact adverse regard With in does that at be North to have of current guide see If shipments full and impacts. to we to there any this the a unknown virus, impact we XX.X direct economies impacts currently opportunities where outlook our the on The unit may range do within not virus million are supply corona be million China the XXXX and our some American continues on Europe on are capacity. not expect our facilities incorporate greater in XX of corona given production the For the we business.

in has reminder prices. which million Net to by the billion $X.XX is impacted Value dollars of sales $X.XX are expected to the range been $XXX aluminum sales are billion, a anticipated $XXX of as range to added be million.

wheel added supported over a reduce expect This Majdi to Mexico, also of XXXX energy $XXX Mexico, already imply. expected by is per as to volume and improvement would initiatives to including lower increase million year costs of discuss, the $XXX offsetting outlook. the We implemented year in in to savings, in sales of be the the million. the consolidation value in facility, guidance EBITDA the Polish line is investments Adjusted range and energy production procurement an mix rationalization vehicle product the in the range

procurement in effect EBITDA well have move improvement which will savings We the initiatives a As XXXX. for continued take XXXX, we throughout in see should year. as we progression

Our for in million, flow approximately to expected and interest $XXX million. be are $XXX the includes range cash expenditures million cash anticipated cash be and which $XX capital to of is operations outlook to taxes while

want year open XXXX. the and the call and now December of to full on for fourth results session the I question XX, focused ended quarter the answer

meeting nominees, time. will have these matters to all be regarding investors we we recommended not we matters and topics. coming XXXX and investors with addressing to Meeting the engaging will relating we proactively our in assured, with Annual While be slate our at engage and questions on Rest continue our of will this director on weeks, these

the to operator. the I'll call that, back With turn


We'll Van B. first take Riley FBR. from with Horn [Operator Chris Instructions]. you. question Thank our

Chris Van Horn

to range puts you and that higher gets adjusted kind especially of that on starting the just guidance, XXX? to takes what are of What primary XXX and So, on the the on EBITDA. end

Majdi Abulaban

that reduce performance all initiatives and we'll the couple guide needed to see the that in place these been lot a execute Chris, our of we've last discussing take other or to on earnings the improve and portfolio, calls, of main hold XXXX costs consolidate to in where we footprints over of the have driver the begun to in actions results. Fundamentally

it's now. in So, what's right fundamentally that's the guide

Chris Van Horn

your think you that IHS When are you Okay. your using, platform or data production or I for or mix? about LMC are assumptions, underlying basically program adjusting

Majdi Abulaban

really is North America and debate America slightly you take data The which No. North is Europe Europe, down, IHS flat.

for Clearly, schedules downwards. really flat the forward. XX going use customer So, weeks IHS slightly to its we and next

schedules changes our We in these customers. haven't seen from any

are European a American Now based mainly remember, North and we company.

think As forward coronavirus and and of and and us, out the seen. how that the you and it impact on shakes think on the hence take that such, they're OEMs be and remains to ultimately impact scheduled

We guide. have in not incorporated our that

Chris Van Horn

Can Okay. Got sounds XXXX. from stay you're had strong it. here. not you guiding a you give like And really that just guidance as any in be there? then, the XXXX. on in reduction on operations, to high It sorry, detail The cash for to

Matti Masanovich

of if think a Chris mean, it, got in capital, I about we XXXX. you Well, lot working out

onetime of continue to improvement levels. So, do sustaining instance, out you actions it capital. when drive outlined focused it's have a to working take so inventory DIO for We're improvement and on We it. capital like improvements, working

But had So, positions area improvement executing guide we that we say I at the looking we And the it think going we levels from be year of and of we in in is are I working are generate that capital what end what I'll kind EBITDA the can can articulating. is, XXXX. of said we that to feel that's generate, XXXX. from what one now sustains pretty standard the right on

in in us some unwind, build in to then a we aftermarket inventory we're little cyclical which first Europe, requires tend as company, up first As fund a positions have bit to we inventory half. you the know, the as an we business and half invest

in end the provided. the we we've working seasonality have to capital, confident So, year, of think our the I but feel ranges at very we the

Chris Van Horn

but is over color. for to EV versus between a us remind much more inch to specifically, maybe thanks an traditional your wheels IC and technology a XX, IC Okay, opportunity? and vehicle EV great, on XX just just depending, than an content maybe maybe apples apples then that shifting your for comparison per content a the EV And obviously your

Matti Masanovich

I depends. mean, it

for where forming vehicles and the all the bigger light weighting as of big still off and we really aesthetic So, are aerodynamic light so but alulite mentioned put a can there though lightweight, carve we customers clearly flow Majdi them to get, want weighting is the more wheels, make of we alulite and the EV still technology is some it's we it's and about of kind which of wheels, we so we some as all earlier, so that can electric technology our try not much make can aluminum cutting them back wheels. larger more so

market inch and in inch So, see the you'll still XX electric the XX space. wheels vehicle

all that able as still So, weighting value and aesthetic is there's so we we we But because wheels. when well that add of kind light were an get well. and alive view about a lightweight it's to trend charge clearly, definitely more it's

Chris Van Horn

from on how congrats And Is the that responding contract are product? for take iteration initial well of they're the bidding your the through that life me, launch. then is next on what's that go an end your then how and cycle on of to customer for actively current Does your you that its last the with F-XXX. PVD F-XXX. that Okay or

Majdi Abulaban

excited going summer It's we here. very the we other technology, to more applications and that actually that front. is which the this great very making customers. we that the has delivered quickly have story capacity in with We're progress bit of a mentioned, actually the good a little as on from expect have team engage to next been Ford start Chris, generation PVD is I awarded about F-XXX, on


our with Phelan Richard from Deutsche question We'll Bank. take next

Richard Phelan

I you. questions. had three Thank

the clear First of wasn't it Fayetteville is, to status the restructuring.

in us there workers of the what's estate real the terms XXXX. are plan the update with just could gone, all you as in we If head

have. end. comments at get account And love working to receivable capital could update if us the outstanding question with lastly, year you around any Second factoring the you was I'd just

but your can space You in virus, if the there's is impact which beneficiary, in competition say that perversely, in China. of much of one corona the because guidance no from your I that, has auto is manufacturing the business few adverse potential so mentioned a

any or can terms in plants that And starting up so you problems either otherwise? if color provide I'm competitors be your wondering may of facing,

Matti Masanovich

first take add can then question. Majdi part to the the I'll

So, first part the on of question was Fayetteville.

have no after was December, We rationalized, production QX, in production the was so Fayetteville workforce rationalized. workforce

facilities So, now up we on where the what CapEx wanted doing we're go-forward the to various the equipment needs cleaning company moving around basis. is some utilize, facility, of to which globe, offset the had some a equipment that we help of should

engineering So, that's to we which plans very left. R&D but have there have to change or the will the number, we a, while we center I small a you an want no and give maintain Fayetteville in workforce we have modify don't Would capabilities. have test capabilities of exact there's engineering and center, type

center we'll with Fayetteville. in engineering our So, continue

we haven't announcements. goes, any as building the made far As

But, I work to getting the equipment. lot have of and that's of a but if change it to We say significant cash do flow, that, clean coming at. that would proceeds amount not would a up the what you're there's

as million for AR year lower ended than goes, far year $XX factoring As the prior the we factoring. AR

the factory $XX end about million the So, we've factory totally million of AR at AR total of and got $XX in year. about

water we to So, perspective. from up a factoring lower have level the

of of pockets last we open weeks various and on where the capacity have course And specifically OEMs, two over have on capacity. calls from the then question, our your China inquiring we received

If we that could a believe coming. to nothing it a there but us, So, be potentially be else, tailwind neutral be tailwind. could it could

comment inquiries two So, weeks. to difficulty, they're the last if are from competitors standpoint, and we supply a where have the but had add anything to Majdi, want chain at don't having to on I you in want this?

Majdi Abulaban


Just coronavirus. on the to the our implication for frame business

not So, We standpoint, directly China. product foremost, an we in from do China. and have ship operations don't exposure into first

first. that's So,

of a very supply chain, there. we terms from exposure actually in have limited Second,

mitigation in tools job makes We great of material. team it place some have a some has and putting indirect resourcing plans, done and The sense. tools where

China, We the have in context percentage the out a exposure very, our limited Europe. of and where into a ship OEMs exposure our low very that's of vehicles

customers until, happen Now having it going to said what and production as you impact with clearly be the and know, that remains that, is seen comes. to as

respond. them risk well. exposure of us as supply will chain And opportunities, finally, working Matti their they where and pull mitigation in They're China support to for as customers to their our can. plans very from our for know We have we support to them together mentioned, looking and terms footprint we're

Richard Phelan

Is point? impact it early to at say, this any

Majdi Abulaban

That's correct.

Richard Phelan

Okay, great. much. you Thank very


We'll question with from Stephanie Morgan. next JP Vincent take our

Stephanie Vincent

taking Thank questions. coronavirus. addressing my Thank you for for much very the Hi. you

And weeks risk it risk, Just to press had supply China bit obviously few talking and bigger and there's chain, having BASF on Italy some just then listening is inventory of were details biggest guys a little know chemical more the is didn't on however that. know the I on quarantine a becoming to a about, your they if you some there. thoughts

like IHS. is market. So then to the And Italian manufacturing on just your hear views in exposure on on to your piggyback question Chris's I'd to second my

global down was production aggressive pretty between which supplier expectations. yesterday expecting IHS's So, on versus X, X to you had board another

the room versus So, guidance like how your current much expectations. do IHS you has feel

Let's say towards they believe were level more down which versus twoish. are the going five i to move where they five down is today level

Majdi Abulaban

because… the Maybe you repeat question

Matti Masanovich

hear hard you. to So, was Stephanie very it

virus and So, third Is coming our first corona chain supply correct? was to kind exposure supply was the fourth skipped. in question the or word and you chain. were that on question, If understand I in the of every

Stephanie Vincent

you Yes, my can were, so hear questions me better now?

Matti Masanovich

We can hear better you Yes. now.

Stephanie Vincent

few to corona and X guess then you Italian for some quarantining a IHS, the question yesterday, on global I chemicals of the a expectations detail. you coming American with the I exposure, Thank you X your I know production first we the And side. asset a supplier need virus. didn't your IHS, views was towards finally, demand? North chemical we you just know your activities didn't much more inventory, players to so in could we on on left that your production, then your five only global have I question but down on have if just for exposure So that in have say supply chain, say view, weeks have out on-cushion do versus had that ask guess my on given negative sourcing dual your there. wanted And they manufacturing European also the, a how of

Matti Masanovich

tooling, supply been to believe spend we've of get China. got the alternate some our we've China in chain, and and it we've we prior significant able exposure, supply and indirect We've crisis have do equal we've at we to the We chains, some And So, really assessed got at sources specifically don't of the been risk. tooling were breaking. costs. kind out some tools

don't So in chain. big, a number That's supply see us issue one. our big necessarily we for

impact. of our Italian three and the back and the we German three production a and the of customers China are don't X% I have have the against we supplier have has what virus think on guidance and that so Italian as believe if that expand. happen some then one have be are as driving the don't you could to that. what impacted but believe dramatically manufacturing to come much aware, customers that's were corona a Rover we now you product it from it I now continue For to and big they if but is know spread, continues spreads the that export guide guidance view exposure think on I standpoint, little China don't cells what the assess pretty a a But exposure. throughout, have huge the are to I but standpoint, big Europe footprint side say exposure a global impacted, I view get Land that And some very the big was going spread look customers as that China. would does Jaguar, the would within would the where don't production size it from to sales down, we to our to is room that's a There

China. be exposure export Rover normally to from nominal have and expect impacted We Jaguar wouldn't we to to and sales Land


next our Buckingham Chin Glenn take from We'll Instructions] Research. question with [Operator

Glenn Chin

I you you Just mentioned initiatives function back improvement the guys with that of your of a you backdrop year. operational, and et going in efficiency that envision cetera? have comments or the that continued respect to Is EBITDA the is that it expect you function volume through think a to guidance, progress in you the as Matti,

Matti Masanovich

It's the latter part.

So, from year-on-year, say we that second we're launches. a half about half launches just are launch heavier in the I'll first launch than in from a a flat so the little perspective, perspective, overall are

two have little going are is a we activity in more in first a Number That's half. heavier procurement launch team central we're drive we savings consideration. one procurement we as the savings we going So, actively take see engaged our as hold, will to in global year. improvement continued global initiatives and buy trying source we're and and to move the of so throughout the spending all the procurement

Now, Majdi many production initiatives vehicle of It for in as rationalization. were done was instance the mentioned QX. for implemented

ramp up see savings that energy XXXX. So, kind forward, one's go continue of you through move as we But we'll to as done.

as to go going see we EBITDA forward improvement from it's perspective. So, be, should we

Glenn Chin

Very Okay. what guys then from questions Thanks. VAS. strike Can the the share some And just terms? VAS you UAW impact on was good. in

Matti Masanovich

strike. VAS We the to approximately related can't the XXX,XXX units we give had you UAW terms, so

Glenn Chin


of sort Okay. And to then, sticking VAS.

sequentially. or your that wheels GM any the acting of strike? of XX seasonality to So, inch Is there down proportion function is slightly that a

Matti Masanovich

GM going mix, say I'd it's certainly and be strike to impacted Well, overall just definitely strike GM it. the but

Glenn Chin

that, still mix is if than declined Okay. And a year-over-year then tailwind? ask unit on may more why was VAS, I VAS sales,

Matti Masanovich

Give second me a here.

Glenn Chin

and Right. was et more a VAS year-over-year, a assuming XX proportion sales. but tailwind, was The complexity than unit the I'm was also greater down cetera larger inch wheels share of then or in

Matti Masanovich

quarter-to-quarter, should quarter think is forward space always and the going on not penetration, go heavily look be forward, and I the VAS seeing going of to out. Fairly then impacted up North going and strike be wheel with kind side to you we in UAW as premium content. as Yeah, continue inch see XX quarter QX we

in expansion VAS see to continue sales. to going we're So,

a basis, specifically on but per add unit wanted So, to Troy something?

Troy Ford

we to can that selling as as and price, barometer, we you the a with an close premium inch a come although higher use mix mix diameter the wheel in so XX sales value-added Glenn, and have per VAS, greater finish to inch know, does can a Yeah. like wheel impact a the smaller have but XX greater.

Glenn Chin


gentlemen. good Very That's it me Thank you. Okay. for


queue more in the questions have we no at time. this And

Matti Masanovich

you Thank everyone.

Majdi Abulaban

Thank you.


Thank This concludes call. for today's you participation. your

disconnect. may now You