Lear (LEA) 30 Apr 242024 Q1 Earnings call transcript

Good morning, and welcome to the Lear Corporation First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Ed Lowenfeld, Vice President, Investor Relations. Please go ahead.

Thanks, Jamie. Good morning, everyone, and thank you for joining us for Lear's first quarter 2024 earnings call. Scott, and CEO; CFO. Ray Senior Jason are President Vice today President and and Cardew, Presenting Other have on also of joined members Lear's us the senior call. management team

the Following for prepared will open remarks, Q&A. we call

at a copy presentation these You can ir.lear.com. of find that the accompanies remarks

as making Lear's Before that, forward-looking assist in like understanding statements for remind I'd call, the this begin, take this to conduct we to we expectations future. opportunity to you we will be you

Slide in X, statements other actual to our our differ safe from detailed many in on materially statement As could our harbor discussed periodic reports. and results these due latest forward-looking XX-Q factors

remind non-GAAP I to you also to during will financial today's want presentation, refer we metrics. that,

our most the to is You non-GAAP items comparable of directly on presentation for for the are Slide appendix directed to today's the reconciliation measures. The slides GAAP agenda in call X. of the

First, quarter Ray update. from then business highlights will review quarter results. a provide financial the and will review our first Jason

Finally, Ray remarks. will concluding offer some

Following the will take to happy questions. be your formal presentation, we

Now to invite like begin. to Ray I'd

share year. benefit our key Ed, increase highlights quarter of Slide quarter $X revenue the year. $X.XX, earnings first increased driven operating adjusted of earnings strong, higher turn metrics for of in and Adjusted program. to by and grew We line by billion, flow X, X% year delivering which first compared X% of started the core in was to thanks. XX%, an the the first earnings and XXXX. the last Please to quarter operating million. Sales financial share was Operating to last per with $XXX stronger cash performance repurchase

billion business was quarter. The summarizes in record the and the for from financial highlights key quarter. first revenue X a Slide $X

growth sales with seventh in industry XX evidenced to team E-Systems driven year-over-year business, continues outperformed margins. of the higher market the consecutive drive points quarter improvements production, E-Systems. over in as The by Our by

acquisition turnkey WIP automation further accelerate strengthen the design automation leverages challenges of announced capabilities. for globally. automation our Industrial that help to solutions industrial our Yesterday, we to robotics, WIP complex software initiatives Automation and will

progress our this lumbar year, be number reduce Volvo in seat with Lucid. Later We Volvo Lear's we of thermal complexity, in comfort solutions MSIs. modular and while lower massage, Lucid and to modules The ventilation, component parts, while combines the lower continue a make module and launching weight cost. performance improving combines resulting heat, ventilation module will the at strategy.

for first addition, for the is our In initiated we with reasons. module launch XXXX. in complete a for vehicle seat validation scheduled incredibly Motor Company to opportunity Ford process two exciting This

it Lear thermal responsibility gives comfort trim. the components design for First, and

integrating allow validated, time reduce fully Second, assembly the it to trim thermal our in cover. comfort the us will once into first seat components This the be will facilities. complete our JIT application automotive

In our diversify China, strong we BMW we FAW have we customer relationship of Toyota. a wiring our in base a result second built. is with customer our seat with award won complete E-Systems, And continue program as that to first

Lear recognize innovation as to a continue in technology and quality. customers Our leader and

of $X.X Motors In shareholders. extension recognized XXXX. to cash and the increased February, of of Lear's consecutive approved returning to through seventh an Lear share billion General committed the the excess Supplier company's For remain Year. We our authorization repurchase year, Board the as to end

Okay.

to Turning X. Slide

efficiently to Accelerating significant will an and drive of digital combined for IDEA and artificial our our the extend and important adoption profitable manufacture creating evolution growth engineer innovative automotive Those strategy. effectively will that adapt of expansion. the the introduction pace us and the growth. and with tools best more transition, introducing surrounding competitive are margin opportunities that enable uncertainty companies. products for positioned develop new and most and risk Lear, geopolitical is inflation, intelligence, by will in wage EV challenges We advantage of automation Elevated be

consistently has faster invested identified and leverage and automation IDEA to processes job will safety, These our product [ broader employees new quality Lear for reducing become opportunity technologies ] a improve our efficiencies allow with With satisfication ergonomics, products to Lear, development businesses. tools in manufacturing while Lear while efficiencies to processes in innovation our to streamline drive enhancing in in and by we higher a and both operational excellence. combined robotics leader move at our and accelerating Digital costs. plan. resulting

capabilities. manufacturing of costs. manufacturing and within reliability, Through strategic American enhance our North material ASI's investments ASI's Slide our of capabilities uptime to brought history facilities. improved in-house, been X deployed retrievable we just-in-time automation have delivery, equipment in automated throughput systems Lear's has our acquisitions, our key plants. all illustrates long our lowering and storage

automate movement continue within to across our as material We globally, will E-Systems. well seating plants as

end-of-line to quality to of automate functions automate significant and all to installation and wrinkles process the to resulting performance facility, way us seating and InTouch movement seat the quality The fully remove testing cost finesse process. material our customer's of improvements. assembly from just-in-time seat manufacturing within ASI's covers with acquisition combination the in specifications. to final The Ultimately, steps automate we testing plan all capabilities ensure the efficiencies meet equipment allowed has to of the InTouch added aligned

and vision utilization and of optimizes leather software, uptime equipment Thagora's of combined with precision use productivity. capabilities, hides, systems cutting

additional system our be with over to We of months. are application globally first the across facilities the next XX Thagora leather deployed performance improvements expanding

And complex Automation. yesterday, is in leverages AI, the supplier in that footprint be in and our European industrial develop turnkey We automation announced solutions WIP a WIP continue robotics vision Seating to multiple to Europe. systems expands and and evaluate our to technology in to WIP's Industrial automation additional can acquisition of applications E-Systems we tools problems. plans. used accelerate

and both forward, in Looking will opportunities of continue to additional Seating we E-Systems. to rollout automation evaluate the tools accelerate

completed facilities. These leadership organic software enablers in operational to manufacturing expand our our key with working year, coupled initiatives, their last are acquisitions, we X and example, foundry programs strategic excellence. For competitive and with to in advantage Palantir utilizing continue started pilot

manufacturing to Turning of vertical targets developed E-Systems. our capabilities our several and to innovate attractive like we proposition in customers. us of capabilities innovative and accretive allows expand growth. Seating our offerings the I'd The develop offer for recent product our Slide combination have profitable in are products margin new and engineering to integration years both value discuss an products These to X, drive segment to to and

seating and vertical our acquisition Seating, Automotive's Antolin's In business Grupo integration valuable Interior Comfort Systems, IGB provided of Kongsberg capabilities.

comfort develop comfort are two The us awards our validation seat module to first manufacturer component solutions. proof components, module customer allowing in unique thermal is our proprietary strategy We are the complete complete only recent modularity that for working. our with process thermal in

overmolding technology Board with Seating E-Systems, unit engineered revenue precision thermal Combining of from billion cost operating XX%. In comfort is track competitiveness the achieve and Intercell M&N capabilities stamping XXXX, connection margins acquisition Our from M&N business expanded the component Connect on of in by of improve systems portfolio. our target with and of our to $X the our products. the and molding battery disconnect

E-Systems. a the and ICB, products key As in BDU we margin be volumes growth on driver will these of continued grow expect

designs through to with will we at engineer lower allow are cost. products IDEA The implementing a and us innovate initiatives improved next-generation faster

call the to over Jason for like financial I'd a to Now turn review.

exchange year U.S. and weighted in by vehicle and by first X% RMB. X% the shows the against decreased last Production standpoint, the a same XX Europe North X% in From Slide Global production compared euro in the increased sales Ray. for China, X%. the America was volumes were flat but production Thanks, weakened dollar against down key while a basis. currency strengthened volumes on rates to quarter. period and Lear

Slides highlights market. over Lear's growth XX

Chevrolet For industry backlog over market with the X growth X Seating volumes contributed well growing QX America, the market. XXX Higher Seating Seating. flat North in growth the volumes production Lear in offset market Challenger In Sales region. North America. first platform points favorable quarter, Colorado E-Systems, in E-Systems and to the partially Duty, as platforms mix Lower Dodge percentage E-Systems the Canyon, build-out and GMC impacted of the by Super and on as every Chrysler total was in over and outperformed Audi percentage points, mix Escape unfavorable points, was XX such above Charger reflecting growth. as platform Ford and company the and on

revenue growth growth by iX. was Seating, Rover, outperformed market by X both China, higher series market segments Rover Rover Conquest Europe X BMW Land from benefiting over in percentage business the the volumes point, point, as In programs such Sport. the and Range driven percentage X and with Range on

quarter first XXXX. of results Turning record. the X% XX, year-over-year to will our quarter to billion, Slide financial $X a for I Sales increased highlight first

Excluding business up foreign our addition reflecting new in both commodities the X%, impact the acquisitions, of and segments. business were exchange, of of sales

million, manufacturing charges earnings were to share, plant and The core higher totaled in new lower benefit per related Adjusted $XX million items, year the and to earnings resulted and other addition and compared $XXX our future primarily on $X.XX by operating operational the primarily earnings earnings net which of Core performance positive last million, earnings share not as improve Higher operating to a closures Europe compared earnings repurchase were program. Reported special charges per were to primarily shown year-over-year. of restructuring business. structure impairment reflecting slide, year. increase are $XXX which $X.XX, improved Fisker. offset to cost ago, from reflecting in our the share

offset First reflecting in year, operating operating earnings, partially cash higher quarter last with was higher restructuring. line cash flow core by

the Seating operating primarily backlog, or platforms. XXXX, billion, partially by quarter from an offset explains of the adjusted and X% volumes million their $XX $X.X Slide on variance and Sales sales the margins lower first were our for by XX acquisitions increase driven in recoveries, in commercial segment.

flat. Excluding foreign were impact acquisitions, sales the exchange commodities, of and

compared million, million and margins backlog X.X%. XXXX, were Core were margins to with adjusted our benefit unfavorable of from margin-accretive operating net costs, mix. including was $XXX earnings a of slightly or year lower operating down platform our commodity Operating down as X% by performance, last offset $X

in the margins explains the XXXX. E-Systems an X% and XX billion, were $XXX adjusted million or for from the $X.X variance quarter in increase operating segment. Sales first Slide sales of

earnings our platforms foreign of of driven volumes reflected X.X% increase strong significantly XX%, backlog. Core of compared operating by performance sales on in and commodities, or Excluding operating strong were and up X.X% in the exchange improvement million improved platforms, sales $XX Lear net $XX Lear million The our to primarily in impact sales XXXX. volumes backlog. margins to margin-accretive on higher and and an

assumptions the basis Slide Now shifting currency to XX that our production year XXXX of vehicle provides outlook. volume full global outlook. form and our

that assume assumptions, be global industry global forecast. aligned midpoint the remain which a our on sales our production range, updated the generally with S&P XXXX At to have Lear we will of compared production weighted We flat guidance latest basis.

rate assumptions $X.XX We are rate exchange average an per Chinese rate exchange X.XX RMB and same maintaining to average dollar. euro of the RMB exchange of an of the euro

our XX Slide on XXXX. detail outlook provides for

year consistent guidance full for and our outlined Our X. first we are on our guidance to company were full earnings the the quarter are range our maintaining call track February as results on of the Total operating year. of expectations, X.X% with margins achieve last midpoint during

both quarter expected the to slightly in be first margins segments quarter. Second flat compared are to to up

well engineering to are from contracts as negotiations, higher in effect continue labor that commercial take we facing, progress costs in second higher as operationally hourly as the While make our quarter, costs. and expected, modestly we also

a While the operating second the negotiations. margins year, of year, actions, second and the beginning labor we in certain actions, well benefit as in expect our automation to increases the including vast cost the of become effect combination of quarter. the effective contracts as half commercial the through of took majority restructuring of improve In contractual

closures were Restructuring structure. our in reflecting the quarter, elevated improve to in manufacturing first cost plant future costs Europe

Our the guidance unchanged. full year for restructuring cost remains

our we the will our earnings Despite a to operating higher from lower share repurchase year flat of volumes, increase expectations count as Earnings our consecutive for well share higher as forecasting earnings. share are per industry program. due and fourth sales

shares to shareholders. to initiating of capital we flow XXXX, repurchases Moving and commitment approximately have through of to share the and to highlight cash Slide in to we worth return XX% dividends. continue returned over XX, repurchased shareholders our $X.X repurchase free Since program billion

authorization repurchased cash of free conversion share cash $XX will and extended the to committed to approximately XX, the in Lear's In authorization continue first having excess our our stock which continued period Board shares support quiet and targeting billion worth additional to are repurchase quarter the increased to $X.X share December of February, throughout XXXX. remain through returning in repurchase period. repurchases. We XXXX, shareholders, XX% We million flow

Ray back thoughts. turn closing I'll for it some Now to

with Please improvements year Jason. turn record off XX. first the We E-Systems. started Thank margin strong quarter to revenue Slide in continued and you,

Board extension to As returning key shareholders. and an plan, is Jason in to awards, accelerating. Both Systems increase cash commitment Thermal and repurchase to approved base mentioned, with momentum continue our our customer businesses our just of reaffirming diversify our Comfort their

Lear solutions reduce cost operational Beginning to Forward improve we with efficiencies. identified our creative initiative, and

take position your and our innovation identified and extend vision opportunity Seating competitive larger improve enhance -- our a accelerate automation advantage of to by of further be significant And software digital we'd excellence. Accelerating in our tools. and will also Lear operational systems, strategy margins. to much is evolution and E-Systems conducive now and positions leadership broader use the a questions. returns We and drive grow to IDEA robotics enable happy to

our from Joe Instructions] question comes [Operator today UBS. And Spak first from

the to the like of got helpful. comp, in start, looks over over some this and drivers quarter of in tougher market business to in on just, a the you think you're cadence? next you've again if will, expecting about year should back the year. of that Because XX% of it start just there then little sort bit year how the E-Systems, balance maybe guess But you bit what be half. we really go in a would again, a Can growth color of good year-over-year I for the little easier sort and

first the which highlighted There favorable really the and in of volumes prepared we our some drivers of was some It combination a on two backlog quarter. the were top Yes. remarks. production platforms, in

it for to you of would year at expect right, points we we growth X about sized in XX be E-Systems. think full of markets points the market we As and expect look over do the moderate, balance to I of year, growth over the up about that

certainly the a on overall, but based So the first market be growth strong quarter now. will perspective right assumptions solid year over highest from our

then a guess, Okay. just bigger little And one, I if bit I could, picture.

sounds actions. You European plant talked it's about to restructuring. related It the some like

you So remind think restructuring year, if us for you can of, need guess, the there? do plans just you to I more

And about automation. by then talked higher you also, Ray, IDEA Lear,

had about as in of we that there, recent also corresponding and should this going automate also organic automation? forward? automate a Like we You increase think implement restructuring and a some should string acquisitions you efforts. How to more, expect

me restructuring Let with this start for outlook the year.

quarter we $XXX than still European as than Our the market lower front-end below production guidance loaded is million, very focused and XXXX what, likely second well. pre-COVID. did -- it was In peak still, Europe. -- We're the pretty XX% as XX from was XX% where will on that really, and be think more it significant expected. I the in And

from volumes acquired costs have our in Europe. Europe footprint When Eastern steadily And Eastern to the restructuring we're Kongsberg shifting they the so IGB also opportunity North lower Africa. much across tremendous higher And see doing to board. reduce pretty been to facilities we've we Europe. But and that in did some our by cost operations realign we to

launched a wire Tunisia from new that We performance facility to improve will have business. Europe Eastern significantly We're also to Eastern Africa. moving aggressively moving in Morocco. the seat North that Europe covers pretty We're from of

runway of the costs of an manufacturing a so to lot just footprint. reduce our opportunity still kind there shifting of And there's in terms through

a things. those combination two it's So of

point decisions. customers' the And of sourcing then of impact the is restructuring third on some just our

just-in-time the it's an in replacing business has that the plant have Europe, associated had in or of production program we've in customer where JIT facility, replacing it's out so they're a programs which it and with different won't benefit today, our couple income resulted and in And we closure where they're so have of operating action not a plants built really take nonetheless. to for example, had an the a we but them,

are the restructuring. Maybe those talk little a bit about could So IDEA. drivers of kind sort of of Ray the

Yes.

at nature I in and helped bringing we've partners very, and the has years, been I opportunities and even acquisitions of our very how inorganic significantly capital for us in capital, coming purchase is capital. looking lower strategy some needs on specific different own this specific And capital, we think platforms. within designing as discover as think really around we're multiple important, really we're own working what's for selective multiple

that both scale heads And so reduction is ergonomics, in E-Systems quality. lower the how cost, but and across efficiencies the safety, we're facilities, we better improved within the throughput, seeing also much labor these capital Seating, different benefits on within work of the only not plant cost, the is and the the in plants, things there improve

generating are benefits for great those So us.

us labor and today, way And opportunity, we're described that way customer focused and an automate we're at that just-in-time it's in scarce from it that a we're have way have gap a example, out contracts is customer's we the significant with the the we looking standpoint. place. And existence in in a until where very the overview, are like is today helps that delivery in around an contract plants to those from on particularly, because efficiency a world, I particular deployed is all finesse this, my facility, able

customer And needs it. we're on is so are and where very that particular deploying and selective very capital. the implementing based how we volume we're It's on selective it time, at

been has short term. very it beneficial So

I manufacturing the output around or is increasing. the world. And to is real in at and better issue. now. from that believe selective this This very, X is one do be much companies the a strategically It's this, And manufacturing labor position looking very And years to are just and think a X proactively that, that I for of will attractiveness declining area. scarcity jobs isn't need it

a And position to more those that better so Industry going when survive. are to it IDEA and X.X, comes or in flexible, automation, much are

one the expectations it's It's this our reasons and year been but successful. at dividends. why paying And of the very It's so quarter-over-quarter years. really out improvements, not we look just

Yes.

in lot last a your restructuring. There In question, automation it's restructuring turnover our will come impact head will wouldn't terms normal count facilities. part happen of the that a of that the term say how as it A of I meaningful on near result attrition. impact forward, changes going through is out of

a that that factor And going term. is it's move level the to so well. some near restructuring, needle but not of to won't say be not there as It's the in

comes Our from question next from John of America. Murphy Bank

to time of think want on automation question up follow would ultimately about could rough for there give term, long just how is you this then Or net one front. as much opportunity labor? your potentially to costs it is those a just one made you estimate a on does that be Just Obviously, us down operating one cost mean, the over But And replace by I automation, up what could ultimately of an expense. operating be would be? basis? recognize capitalized, one? on take delta

Yes.

on rather bit specifics -- is go as a subset of I'd terms sales, of and labor business not little E-Systems different. In each into percentage but Seating the of a

our a our automation labor solutions labor-intensive working on have meaningful impact will fully and in electronics, longer it's For And we're term. very most automated. on today, -- there's that example, will wire labor say cut content in already there are content little operations most sew. and automated I

process. biggest steps the automate acquisitions our WIP, helping ASI are near lot to coming the just-in-time InTouch, our benefits accelerate the from to and of term, the just-in-time now seeing in In ability sort and of effect you're seat of a plants, the where full in seat the

performance offsetting out is the the and of with well. margins inflation what primarily we're longer catalyst looking In also net segments. higher driver labor and labor we're addition at of on part big business in that, driving facilities Thagora seeing -- automation, a in we're with that That's in wage that for costs side, focused business. The modularity of on. higher-cost way And significant a doing what term, we're leather taking positive both driving JIT John, then to as is the improvements

Yes.

talked automation, the is manufacture how and bit the footprint it you and products concept does the John, think, in only plant, I we've this, product about but the a of itself. little this not change manufacturing

more we the Motor Ford will that redeployment The of that across I where automated. think we of module. will into of on automation be be a it properly program scale multiple the with JIT the into we concept the the facility of significant significant trim is spoke-and-hub Company made that automate what announcement platforms you future. The development can components labor cover out is consider because a to

so combination. And it's a

this partnership with engineering technology plant. What The manufacturing we shop advanced with capabilities, coupled love and the we really the systems coupled the we're quick together. what pace digital with and of Palantir, our floor, innovation is on doing manufacturing that our within with it's we're what designs. They with design, and sit automation, have doing and

that the the we're we've what so excited couldn't happy at everything on we're with or modular where be complementary Seating. acquisitions in we're doing, side, concept with were doing more And I the where made the side. at And we're on manufacturing with to product

moving at a Every is different pace. little customer

that automation itself. with and modular with have sourcing working fine, combine that now we components Some that on product we're which the components, are within right is concepts still the plant XX and individual but customers itself the

successful. time so just to manufacturing And will is the combination what coupled steadfast in the and product we're we'll where short that period a of in doing. continue designs changing had is our of engineering expertise We the on much with going it accelerate. we're be modular design keep more for know a we've to But approach, success plant, a

mean on think can and you you hundred this the you this to it hate of time? a do sounds right all pick I of as but mean, over grow guys And I stuff just Ray, of course expansion land. Or this I all I'm you doing automation, necessary ahead mean, going actions margin ultimately, these a just this think basis of it's to about like the it's competitive the curve trying doing of think are automation stuff. going you I Great. or couple land alone? probably you're add where understand But ultimately remain understand and -- sort business the with points way to is clearly to curve to mean trying the put or this, where on up I to I you stuff. action from the right

John, Ray this additional probably comments. and in term But X% I'm I'll start, the in key well, has I -- in communicated, a we've longer at E-Systems sorry, to enabler X% look as midterm some Seating achieving the Seating. of targets percent margin in X% and E-Systems target X.X-plus as

XXX to and And margin key targets allows to achieve us XXX over or in grow points and so that hit a the segments, It's think, growth key, established basis beyond enabler points a X the we've not that both X a competitive it's that. points points I of necessarily communicated. basis that targets business, differentiator the we've market

Jason the at in the I'm love it Right, tell love that going and you doing side. we're and I what then manufacturing -- But I way goes to good. it's

pushing We our targets have we long agree haven't right term. to harder. move faster, I changed and we're now, that

is a your to term. to term, at I obviously, where answer John, survival. gapping it we're question, But there's I think out benefit, think longer short about to

looking and that the be I companies did on this not the and move companies direction think will the that be outside this looking companies in. then fast that capability enough be we'll those in that have there'll survive,

at And commercially is and And business. expectations. customer so statement. I in the of you you can some short those. we and with can sides the a in cost that go it's win one both When we've the powerful how competitive and do of that you world, analytics your think get are tell proven it's how strong, data, the both term, most you And

think one I this standing. term, have that be advantage those Longer the companies will

pushing And we're differently, we're throughout so and accountability we're the driving organization. fast, thinking

numbers. we outperform to So want those

now, accelerate. we're steadfast the short we area is on I right staying think we've that can term this given. that an targets But

Okay. That's helpful.

Just follow-up. one

comment labor facing of X the a supply challenge Tier X On down stress Tier X hearing because guys, and shortages through below if I there supply something could base, to labor. help just that is well little your And automaker and well. if are the X on they're able we're you and wonder of lately, to scene of what as that is handle right bit labor guys and cost the value you with that hearing that, chain, constraining you base, you're really -- more customers. production as or

what No, you're accurate. is I think hearing

think chain, the generally on metrics regions, different significant or labor based depends of is turnover And absenteeism issue. workers. a it I when supply on the it's types throughout scarcity of across lack but talk board, you about just or

for all issue, that We're issue. it, throughout supply I with And OEMs the is an so been that suppliers. we're seeing. our working base We've been an able to balance but think, has it

just cost than seeing last years. that we're component of say, what we've level experienced to the this add year number would I less that, of over inflation to the is

then the taken moderation together positive some on and side, labor seeing the you're are when acceleration and So maybe side, the on two slightly commodity overall. some

next Colin Fargo. from from Wells comes Langan question Our

talk little One, year. margins the of you about a through bit maybe cadence could if the

much called and in going commentary an a that You of QX. think out engineering how we increase would as margins might your Is that quantify to Any maybe drag sequentially? labor to improved. be offset? in into way have I expected

Yes.

or up segments So both did flat the to we we quarter. we each didn't but be for slightly expect guidance in say second provide quarter, do pinpoint

quarter QX We the wage and and economics do second to do to that, the expect to in tailwind the so the of offset the volume quarter. QX. expect with revenues of you we And from backlog, sort will composition associated increase the then And have first higher be by which a margin volume we be be engineering. think than

push, of So a are margins result higher that commercial are the and those the second ongoing. the in quarter sort from the two more negotiations actions and operating

this in the year about of year, North various integrating actions for at have to additional beginning that we taking actions of also some we're shifting the the IGB from restructuring of I we Comfort, with associated Europe footprint end last Lear. entire business. Thermal synergies and but the took example, talked our So improvement into Africa, Kongsberg savings Eastern performance and the

throughout the in as also of business technology. to the our then that's of Europe from have going in the European deployment seating we lower in lower costs We us deployment labor will plants we Palantir's tool sort move of foundry through -- benefit And operating have that Thagora year. costs our leather

half, compared do to the assumed the and lower the half, first loaded, As the be to half second back-end flat from revenues driven half offset we look slightly in at expect half favorable volumes by year. and of backlog by the to we the second to more production first being the really second up

So America, fewer Europe of quarter North you the seasonality the bit little that a into to days, downtime August and, year lesser quarter demand second normal And maybe extent, assumptions where in production tail-end holds the up. with a in Europe, a bit could just in year the around middle hedge just and perhaps if in the there than and have in then lower the fourth say, then be lead a that on of volume upside little volume of to overall. demand-related the production of

of throughout sort the mirror I of of volume think on platforms, assumptions you cadence mirror our will IHS's will least the look kind year. at that, that at if revenues volume sort our quarter-to-quarter,

Just follow to up.

up flat flat You Does mean to but up. margins down? percent to that said are revenue slightly quarter-over-quarter,

guidance, Again, the would margins the but than weren't to looking second first Colin, higher we provide we be in expect pinpoint quarter. to operating quarter

also it's are think to number commercial important have negotiations that we out ongoing. of that a I point

that there's say hit will ordinarily business play quarter. in maybe price We're with we're to rather right lump number the than choppier both sacrifice our the a adjustments customer the a things thing terms a segments than like of sustainable on to reflect term. not to long going a sum. for We're focused for inflation And out doing usual than on deal would of wage on wider in it this in very our how I business so focused piece quarter-to-quarter, agreements, little a And range would.

so quarter. choppiness lead And could in a to the bit that little of

always public see quarter provide we out. on at in we how quarter, later we'll playing do, an update as event a investor And the the

And the it. color just on Got any recovery. lastly,

Some of there change recoveries point? the Is are expectations no this in comments your like more claims. around terms for pretty automakers making at any of aggressive

No, changes. okay, being a haven't. data, from the I handle down, we communicated that. But boil competitive. kind been have very Yes. clearly fact, said of significant from We've differently. cost yes, before, it mean, When there you hasn't this customers we our in always we there's perspective, of different lot negotiations

challenging and control, I think for very it under you're cost in you it. you're costs how situations you and house, have your resolve other a have don't going makes it for not when you're asking costs, mining clarity asking you or for recovery own and resolution own not your additional competitive, on

Our very the position cost have present case. we've most is been always competitive, the facts, successful. have data, be the your And

make the will I a bad across might for results. negotiate for we quarterly don't facts. feel the deal on we into time significant to the resolving a it business, not with Corporation is element result protect we doing the only see based resolving But with customers. best driving sustainability changes Jason's To we're the and We're we're how Lear like take said, intent where how there's to I it board. our negotiating sure pressured them. in And that We're point, on

customer each And handles differently. so it

up. significant position. haven't setting externally think on Some we're focused changes. of I a they're we in But it seen good are kind more open and how And

of our I the want timing of the to these. how resolve more, optimistic about said, direction. are But very one moving like I'm think it's negotiations we right it. Jason in each

something a We event particular to will to a quarter quickly jump to try in resolve time result not at the quarter. up or set

So we're long focused on term.

Picariello comes James next from BNP Our question Paribas. from

the speak to run-up the year new supply chain first for remainder touched fair, the the to of of this, the backlog across across the the million know for on start, quarter? the but $XXX can and experienced which, you segments. for slower new Just still you the in I in given Seating, million on the X launches And right contribution number? mean, visibility be business Is E-Systems $XXX has stronger broader I just embedded the been

there no backlog, Fisker, Yes. was around been volume have that. but our I'd updating impact to a having modest of We not There you say see I'll were and example, changes. full no plans course, overall, releases the production. backlog. one conservative that can with year some we're the give we just in restart on assumption pretty

that it's won't about think I of materialize. So million revenue just $XX

the negative a that's backlog. So bit on

of second it in they've up programs backlog. Acura ramp quarter, We're another backlog. first step Those the up. the GM's began the the of very increased an the we other throughout Prologue last and tail-end ramping and driver taken That's battery have on electric Honda steadily Blazer driving ramp-up E-Systems are to seeing trucks EV, important that the now the BDU ZDX. Also year, On into of quarter, nice a up E-Systems, important volumes the and revenue. the

through of are So we how quarter the to have pretty good be least visibility, going those at second many produced. of

series the side, Seating BMW X as is the of anticipated. and On iX kind launching

associated in The programs the performing expected. timing Seating EXXX we maybe impact which seen, and only business is volume what we've consistent on The segments, the an modest Volvo has with other other that are launch. backlog the change both with

There's may that issues I software talked challenges other that think that they've publicly. that volumes through working the on about they're platform. some or impact

platforms, year with we on full very existing at overall. of we combined production our felt maintaining our look as midpoint guidance assumptions But the comfortable the backlog

an two then Got it. on pieces That's just super update in helpful. the And guide.

$XX think you million. FX a headwind I embedded to transactional had

there first us. is with your the quarter curious Just behind what assessment

quarter, on strip net the almost Lear's year you commodities? can which assumed And within full commodities positive the just what's at that million and then bucket performance looking for commodities out and $XX in totaled combined,

Yes.

So second with in terms guided year our what into unfold of year to. quarter no here consistent is assumption. we're the first transactional guidance or What seeing in been quarter in full we the change FX, there's really full

the working million range and program as our anticipated, the for $XX is full year. hedge so And impact is still in that

a positive In which terms impact is more expect full year, we E-Systems. than in commodities, Seating in modest the for of

full impacting performance lot in happening year driven Seating, the operations restructuring our And in And improvements the on we more is so to benefit E-Systems restructuring side. some E-Systems guiding really the in that we're about the but our seeing net of what's talked wire for by business. North and seeing that's a how also we're America savings. We're also

have lot We of a launch activities.

operating year well, of we as and sort the kind or the that of as meaningful that's key progresses, of a of improvements performance E-Systems. E-Systems in and driver to So enabler see subsegment see expect we costs net

was of think really see year strong performance we the across as during and the quarter, full of the display And that But E-Systems. expect more first progresses. kind board on we in same the I

next Our question Evercore. from Chris from McNally comes

at architectures in have there Lear, they new have of more Is the of for love some to know I specific opportunity of being look China than architectures, play and programs, XPENG I from quicker feel wiring and seems sort talk out. China, maybe just if a out question, of of may traditional but electrical and that it bit opportunity in zonal wanted to more I around a a for architecture seem done it to Lear. Tier of always We've you Are receiving zonal investor customers, with content particularly do high-level legacy out you of been lots in-house? couple VW, zoom new because discussion like years, these to definitely architecture. you this around get technology sort and China, doesn't around new E-Systems on -- about just expected. moving well just Xs opine of specific systems. working questions little would It's in every particularly priced of sort electrical can't architectures, and we be next-gen

wanted give next the floor about I couple of So in guys over what years. you China just see talk to the we to

Yes, -- field going going here. question. of that I'm let to I'm Carl Esposito to kind is him

Yes. technology number outside We're from zonal actually architecture a of working of already programs perspective customers China. a with on three architecture

opportunities our And we'll there those are business for ground But migrate so are communicating on China and I teams architectures. domestic in And to into of zonal where development. some customers fully the we're that shift architectures see that some with participating us. see think to there

were And different customer we going And kind integration. zonal to are levels at about a migrate of talking those architectures different each of pace. at move

So market. part participating of the in that we're

technology OEMs, may trends that's work design engineering the that initially if that in-house. there there's think any in trends is some the some of particularly we in-sourcing or saw picking the I up domestic are saw particularly But Seating, from the be with high trend innovation with done Chinese, moved ground. of the the what our is mean that seat one China. really seating with it we within out. fastest-growing of we the I has well Seating, on premium resonated And was domestics

up there's that And then technology occur seeing think already very a I moved quickly outside or additional to initially similar but we're we're think trend. replicated to that that going of the very we're in some I And picking innovation. moves be may E-Systems, And China. similar see technology that China, quotes -- of China will on within

with SAIC lesser kind a Polestar, of Great FAW to Co, and Volvo, is and domestic really Geely extent. Chinese and et of the Wall, maybe business their & brands, Lynk E-Systems of The family core cetera,

that change in seen we that so And haven't group. customer

most We So we Xiaopeng. that's have the really don't have with business exposure. where

specifically. So we're not involved -- we're in not change that architecture

components. do western could a point it but scale that markets, sort application is it either or airbags, kind basically or a is if of should to of that And comments just great go of we globally? not it's X-stage that often to quality I follow-up, Because they some seats, that, because using suppliers. And whether where is internal of to give hear be that learned issue hear this Western just growth the export there's an that advanced be this suppliers components lot to Chinese that over working in-house, your they China that done doing ported more often, can they're Europe they they there there's one across on ADAS, multiple kind really scale, a we are when some is and who being of on

opportunities have customers the the particular excellent Europe and the customer. expand the And I about manufacturing, Eastern technology It about have an a we're China. modular right and moving components, that the talk we're There's about one on knowledge not are the infrastructure talk bring around tremendous And seat that, largest, I the combination. within growing in innovation. seeing on quoting to if to to side. When you job the domestics place. the technology ground, continue domestic now of it's large, with the when labor, our we think premium that or have are talk I experience to done of technology able Seating, with supplier seating I depends in then in we Yes, Europe the we we've

So we're a there. position very in good

on depends the application. of of It it where location for the reasons. think I a moving. So they're depends lot on But

also and our Just product we're plants ground but the innovation our expand, helpful to the them. manufacturing on in within are our looking knowledge and for capabilities region very

by motivation the kind evidence to that to add there, partially and of it's think customers. just I a point And Ray's technology the

with is the winning. well. a auto with We're example, where they came brand, SUX, ] Denza us which higher-end Auto, at as their you a on because BYD, the for fantastic and business Xiaomi's the additional Mi If With the product, we're launching but is technology of end arm, ESAF our some innovation brand. to higher won look -- business capabilities, -- and the we've NIO just [ on it's which

unique So the specifically. China the Chinese sure Lear of but domestics of China, in to gravitating but with within just generally, capabilities western if not outside even us we're it's suppliers on move seeing because our I'm products, specifically, not higher-end their Seating. to

but automation plants, speed think that available just on within fast the that, having side the how product moving they're market, and the readily mean, manufacturing to the both side. to I innovation on to add I And

that So capability to that's available very knowledge is and important them. having readily

from Dan And Levy our Barclays. final today from question comes

today. on for Dan Young Trevor

the about mix year bridge headwind out to around particularly like the and XQ XXXX looks you for every wanted $XXX full substantial the million platform it out in ask in you XQ. pretty Seating, on in I volume you bridge, called versus the January. included the mix across First, looks region, much and negative It impacts pretty mix set

year. soften offsetting there mix you're anything just comps? throughout So mix headwinds mix I these to the assume expecting headwinds driving beyond easier these Is --

the is this North a was where backlog. mix pronounced. it's of and we combination Yes. most saw America And

rolling a programs that new on. of off lost business backlog built rolling is out and or So combination either we

from So Challenger for Brampton, first of Stellantis quarter, the the the we example, in Charger, programs the effects XXX, the saw off. the roll

also plant They that were impact a about $XXX had the Audi weeks. taken We in strike assembly volumes. their reduction had together Those an X, unexpected million QX on revenue. on in went for two X

been And absent America, those so we had have items. would negative in growth and two positive North over market

growth As the we at year, balance over look of expect we the improve market do to significantly. pretty

of up the the where the the be For flat that driver with the growth full as to year And of Audi going backlog market down X throughout volume on in QX quarter, lot quarter. X/X of scales they over then of about a points Seating, the it is first of the we first and item at unusual for from the in quarter. in it the sort that of see biggest lost nonrecurrence year, almost

guide thinking just beyond we as move your to of throughout strike. quarters as beyond follow-up, if how the production in then the year? could the to of you the ask assumed recent I That's then very just helpful. And a those production smoothness -- impacts about for XQ customer describe efficiency relative expectation in wanted and/or And smoothness you're the

customers not for one-off we issues. been year. less last last aren't definitely it's with year. seeing improved of and some of but in we're production we're continue ago. year the months the have globally. through part And we first stability throughout definitely a what and improvement a going of saw saw certainly there That's to now. And a an a into that X seeing to it's Yes, say improvement steady be disruptions years X this from We're reasons, impactful There ago, than of handful year variety

want you [indiscernible]? Do and to ahead go Okay.

career HR. he's us, here everything all great in I role, of and in want here week of employees for done just little retirement. on to after at Lear to and part still finance Treasury the team, second important an it's support his bit to XX the him of the congratulate on XX-year personally important and -- of that's a and Lear his successful Lowenfeld We Ed organization call. I IR end Yes, think the This are the been best. the part probably a He's last that is formal the wish and me presentation, take

life. better knowing years working you to been Yes. service work been your the your in for I here all outstanding. you. a retirement with at new has place, all thank Ed, as and I you've in enjoyed wish you your and Lear. left you, luck great I've want It's Lear

you. been I you. much. Thank to and a it. very place work, appreciate things great has ahead. great Lear I Thank see

have we depth in organization. great our fortunately, And finance

so the and is X and who for our Treasurer, And function. the so over we are primary it We've have shoes taking for IR investors, Brumbaugh have X Vidershain, treasury people. both interface will to big, took Ed, Tim Ed's fill overall them. being Marianne with got responsibility

congratulations. So

team, you Good much. Lear very quarter. thank

you. our success. continuing to Thank forward Looking

today's Ladies We and you conclude joining. that and conference presentation. call do gentlemen, does for thank

now disconnect lines. your You may