Earnings call transcript: Opmobility SE sees revenue growth in Q1 2025

Opmobility SE reported a solid start to 2025, with first-quarter revenue growing by 3.3% year-over-year, driven by strong performance in its modules segment and strategic innovations. Despite a challenging global automotive market, the company maintained its guidance for 2025, focusing on improving operating margins and net results. The stock saw a modest increase of 0.46% following the announcement, reflecting investor confidence in the company’s strategic direction. According to InvestingPro analysis, the company appears undervalued, trading at an attractive P/E ratio of 7.3x with a market capitalization of $1.42 billion.

Key Takeaways

• Q1 2025 revenue grew by 3.3%, with a significant boost from the modules segment.
• The company maintained its 2025 guidance, focusing on margin improvement and cash flow.
• Opmobility SE is implementing cost reduction measures to preserve liquidity.
• The company reported strong growth in Europe and Asia despite a global production decline.
• New product launches and innovations are expected to drive future growth.

Company Performance

Opmobility SE demonstrated resilience in Q1 2025, with revenue growth outpacing the broader automotive industry, which is expected to see a decline. The company’s strategic focus on local production and innovation, such as the integration of exterior systems and lighting activities, has positioned it well against competitors. In Europe, Opmobility grew by 8% despite a regional production drop of 7.8%.

Financial Highlights

• Revenue: 5.07 billion USD, up 3.3% YoY
• Modules segment revenue increased by 13% YoY
• Foreign exchange impact: +€22.5 million, primarily from the US dollar

Outlook & Guidance

Opmobility SE reaffirmed its guidance for 2025, expecting stable production volumes in the second quarter. The company anticipates new model launches in the second half of the year, particularly in North America. Cost management and customer partnerships remain key focus areas as the company navigates a challenging market environment.

Executive Commentary

CEO Laurent Favre emphasized the company’s strategic advantages, stating, "We produce where we sell, which is reducing our exposure to potential tariff application." Favre also highlighted the company’s market position, saying, "We are growing in a flattish market. We are gaining market share in all our businesses." He expressed confidence in achieving the 2025 guidance, adding, "We are very confident to achieve the guidance for 2025 in the current market environment."

Risks and Challenges

• Global automotive production is expected to decrease by 1.4 million units in 2025, which could impact demand.
• Potential tariff impacts, although mitigated by local production strategies.
• Macroeconomic pressures and currency fluctuations remain a concern.
• Supply chain disruptions could affect production schedules and costs.
• Competitive pressures in key markets may challenge growth targets.

Opmobility SE’s strategic initiatives and strong market performance in Q1 2025 provide a solid foundation for the remainder of the year. The company’s focus on cost management and innovation positions it well to navigate the challenges ahead. With a debt-to-equity ratio of 1.15 and total revenue of $10.86 billion in the last twelve months, the company maintains a solid financial position. For deeper insights into Opmobility’s financial health and growth potential, including exclusive Fair Value analysis and expert projections, explore the comprehensive Pro Research Report available on InvestingPro.

Full transcript - Opmobility SE (OPM) Q1 2025:

Conference Moderator: And to our speakers, Laurent Favre, Chief Executive Officer and Stefanie Laval, VP, Investor Relations. Please go ahead.

Laurent Favre, Chief Executive Officer, OP Mobility: Yes. Good morning, everybody. Welcome, and thank you for attending our Q1 twenty twenty five revenue call. I’m here with Stephanie Laval. We will first go through a short presentation you received this morning highlighting the main fact and figures from q one and how we do see the rest of the year before handing over to you for the for the q and a session.

If we go to the first slide, the executive summary. First of all, we are very, very satisfied to to post again a strong revenue growth in the first quarter twenty twenty five compared to 2024, meaning plus 3.3%. That is a a stronger performance of the market by 1.8 even if the mix in term of geography is not favorable to OP mobility right now. But, it does demonstrate the strong order intake of the company and also the the the success of the strategy we have since a couple of years to diversify in term of geographies, in term of technologies, and in term of customers. One of the main highlight of q one was, for sure the discussions around the tariff.

And based on that, we have decided to intensify some cost reduction measures. I will go through that later on, but also to slow down the investment. Even if the q one sales were were pretty strong, as mentioned before, even if we do see that in the in the coming months, the the level of sales should be also pretty, pretty solid. Nevertheless, we have decided to to anticipate or to intensify intensify some cost reduction measures and to slow down the investment to preserve the capacity of the company to deliver strong results in 2025. Moving to the geographies and starting with with Europe.

Europe was again declining in the first quarter of twenty twenty five, minus 7.8% in term of production. And OP mobility was growing by close to 8%. That means a very strong outperformance of 15 points in Europe in the in the first quarter, mainly driven by modules and by and by exterior, mainly in Eastern Europe with with new programs, new launches. In North America, we are underperforming the market by two point, but there is a diverse view by by country. We are outperforming the market in The US by four point and underperforming the market in Mexico.

Mexico due to the fact that there were some model changes with our customer Volkswagen in the first quarter. And therefore, a kind of drop in production for us, but that will reverse in the in the coming quarter. Therefore, a strong performance in North America as well. In Asia, stronger performance of four points. Regarding Asia, except China, very strong outperformance of 21 in the market which was growing.

We have been able to go by 23.6%. That is mainly driven by module in South Korea and by exterior and sea power in India. We have highlighted since a couple of years that we want to to develop ourself pretty strongly in the coming years in India. We are putting in place new capacity this year. We’ll open a new factory in India this year, but we are we are confirming a a strong momentum in this fast growing market.

In China, we are underperforming the market with a with a diverse situation by by a business group. WavePO, our joint venture, which is the leader in next tire parts in in China with 22% of the market, is growing, is starting to benefit from the strong order book from the last years, especially with the with the winners like Chery and and BYD. CPower is stable in a market where the electrification is accelerating, which is also a strong performance, showing that we are catching up now in with CPower and able also to to get new orders, especially for hybrid. Modules is is underperforming the market. Modules is mainly working for German OEMs suffering right now and launching new models in the coming quarters.

I hand over now to Stephanie, and Stephanie will talk about the revenue by segment.

Stefanie Laval, VP, Investor Relations, OP Mobility: Thank you, Laurent, and good morning, everyone. So in Q1 twenty twenty five, OPI Mobility posted strong revenue growth of plus 3.1% in terms of consolidated revenue. It includes a positive impact of FX of plus EUR22.5 million, mostly coming from the US dollar. Excluding this FX impact, consolidated revenue is up plus 2.2%. This FX impact coming from the U.

S. Dollar should continue in the coming months, given the current situation. As you can see on the chart, the strong performance in Q1 twenty twenty five was driven by a remarkable growth in the module segment of plus 13% year on year. In the next slide, I will now comment the performance for business group. Let me start with the exterior and lighting segment.

In February, the group has announced a combination of exterior systems and lighting activities into one single business group. The objective is to enhance collaboration and offer a stronger portfolio of illuminated and augmented exterior systems to meet growing OEM expectations. This will generate synergies both on production and costs. Looking at exterior, this activity was marked by a strong performance in Europe and in Asia in Q1. It continues to accelerate with the new winners of the Chinese market, thanks to increasing awards.

To illustrate this, as you can see on the slide, we’ve started to produce bumpers for the BYD seal model in China. Moving to Lighting. As anticipated, Lighting is still impacted in Q1 by the weak order book prior to its acquisition by Okeemogrity. But the good news is that the group are starting producing exterior and lighting pieces in Q1. As you can see on the slide, for the Renault four to produce bumpers and the Mono calendar with lighting elements coming from our lighting activity, or for the Mazda 6E to produce tailgate with lighting elements.

It is a very promising step for the One4U offer we have launched since the beginning of this year. Moving to modules. Since the beginning of the year, our team has demonstrated exceptional performance. Modules revenue increased by plus 14% like for like in Q1 this year compared to last year. In Europe, the performance is mainly driven to by a significant rise in volumes of modules assembled in Slovakia and Czech Republic for Volkswagen and Skoda.

In the Austin plant, OP mobility has recently started to assemble modules of a new model for a major US EV player. Furthermore, our order intake remains robust. In Q1 twenty twenty five, the business group was awarded to produce modules and extra parts for Robotaxi, an autonomous vehicle for the same major US OEM. Thanks to this award, the group accelerated strategy by addressing all mobilities beyond automotive. And in Asia, the business group also benefited from the high level of module assembled in South Korea for Hyundai with the joint venture, HTSG.

Module has a strong presence in this country, the top contributor in terms of revenue in Asia excluding China in Q1 twenty twenty five. Let’s now comment on the Powertrain segment, which offers technical solutions for all types of powertrains from ICE to hydrogen mobility. First, fuel and depollution systems activity continues to consolidate its leading position. In Q1 twenty twenty five, this activity secured significant orders for a major American player in The United States and for a major Chinese EV player. Operating in India since ’27, the group continues to strengthen local presence in this country, expanding our footprint with the building of two new plants.

In parallel, the group benefits from the start of production in various countries, such as India with the Kia Cyros, as you can see on the slide, and an award that we gained in China for a Genie SUV to produce fuel systems. Regarding the hydrogen activity, H2 Power has initiated the assembly of high pressure hydrogen vessels at the Europe’s largest hydrogen vessel plant in La Shell in France. These vessels are produced for commercial vehicles for Stellantis. More globally, because of some delays coming from customers, the group is adapting by deploying gradually production capacities to meet the volumes ramp up. I now turn to Laurent, who will give more color on the current environment and the measures we put in place.

Laurent Favre, Chief Executive Officer, OP Mobility: Thank you, Stephanie. As mentioned before at the beginning, for sure, in Q1, we have been talking a lot about the tariff situation and the and the and the potential scenarios. We just wanted to highlight the situation of open mobility in this context, which which is pretty unique in term of footprint. You can see on the slide that we are, for sure, a global company, that we have many factories in Europe, many factories in Asia, but also in in North America. What is unique with OP mobility is that close to 90% of our sales made in USA are produced in USA.

That means we we reproduce locally. We produce where we sell, basically. We sell where we produce, which is which is reducing our exposure to potential tariff application, which is unique compared to to to most of the players in the in the automotive industry. Therefore, important for you to keep in mind what we produce in USA, we sell in USA, what we produce in Mexico, we sell in Mexico, and so on. And we have only a little a little cross border businesses in term of in term of in term of sales.

Nevertheless, when we produce in The USA for the around $2,000,000,000 of sales, We need to import some components for our production in in USA, and these components can be impacted by the by the tariff situation. To be noticed, that two third of those components are so called directed by components, meaning that our customers have sourced the components, have asked us to source that outside of The USA. I take the example of a screen for a cockpit module, which is sourced in Asia. And for those components, there are discussion ongoing with our with our with our customers, and and we are very confident that they are going to compensate the potential tariff impact of those directed by components. For the rest, which is about one third, we are having very, I would say, constructive discussion with our customers about commercial compensation for short term or about potential localization in North America or in The USA for the middle term.

All in all, what you should please keep in mind is that that we have, I would say, a pretty unique situation because, again, we produce really locally in each country where we sell. Therefore, the exposure is not so high compared to the others, the direct exposure. And that for for the components we are using in The USA, coming outside of The USA, a very important part is directed by, therefore, will be covered anyway by commercial negotiation. And then for the rest, we have a we have a very promising discussion with our customers to to find a a commercial agreement. Coming now to the to the measures we have decided to take in order to to we have to preserve the company.

For sure, we are in a very uncertain environment, and the tariff situation is not only the direct potential impact I was mentioning before, which is very little for OP mobility, but that is also the the potential impact on the global market in term of in term of volumes depending on how the economy is going to behave or the inflation is going also to to develop and then the consumption. And therefore, even if our sales in q one were were very solid, even if the coming months should be also stable, we have decided to to anticipate a potential growth in sales by intensifying some cost reduction activities. We have been also already working on in the in the previous quarters and semesters, and that we are doing in all entities in all the regions, meaning working on all external costs, contractors, consulting, travel ban, and so on and so on. Again, in order to preserve to preserve the the the the free cash flow generation capacity of. The same we are doing in our production facilities, you know, the production facilities where we have a a decent level of of flexibility because of many contractors or times as well, and also continuously working on performance and on on fixing the project on production cost depending on the volumes.

That is what we are doing in terms of cost reduction, again, to preserve the company. We have been also working intensively on slowing down the investment. You know that we have the golden rule that our investment should not exceed 5% of our sales. And we want to be sure to to be at this level even if the market could slow down a little bit in in s two. And therefore, we are reviewing again the priorities of our investment and reducing our investment in q one and q two, but also in in in the second semester, again, in order to to preserve our our liquidity and also to make sure that we are going to to continue to to deleverage the company.

By the way, we are doing the same as well in term of inventory management, in term of overdue management, in term of payment and management. Again, it’s it’s about preserving the the liquidity. You can see that that is a pretty extensive program. Again, not only in North America, but in all the regions, all entities of OP Mobility, just to anticipate the potential slowdown of the sales in the second semester of this year and to preserve our capacity to deliver our commitment in 2025. Coming to the outlook.

In the outlook, we have noticed that the new S and P, you know and you can see as well on slide, is showing a decrease in term of production by 1,400,000 compared to 2024 or 2025 due to the to the trade discussion trade trade discussion I was mentioning before. But based on the solid start of the year with the revenue growth we were mentioning before, based as well on the on the encouraging numbers of our customers regarding the volumes for the coming weeks, April, May, and June to close the first semester. But also on the fact that we have been launching additional cost down activities and and and slowing down of investment, we are confident to to be able to to deliver our commitment for for 2025. Therefore, we maintain our guidance for 2025, which is improving the operating margin compared to 2024, improving the net result in 2025 compared to 2024, and improving as well the free cash flow in 2025 compared to 2024. As a conclusion, before handing to you for the Q and A session, I repeat what we said.

First of all, very satisfied about the solid start of the year. We are growing by 3%. We are outperforming the market. We are very agile, again, to adapt our cost structure to also adapt our way to work with our customers to the to the current situation. I would say to support our customers for the short term issues they are facing, but also to work with them on on middle and long term strategy to adapt to this new environment.

We have been we have put in place very rapidly new addition with new cost control measures, and we intensify cost control measures I was mentioning before on investment as well. And therefore, we we maintain our guidance for 2025. And we always keep the same perspective, meaning combining the short term agility we are showing again right now, but also the long term vision to continue to to to develop OP mobility in this very challenging environment. Now it’s up to you. We move to the Q and A session, please.

Conference Moderator: Our first question comes from Michael Fondekis at ODDO. Your line is open. Please go ahead.

Michael Fondekis, Analyst, ODDO: Yes. Hi, it’s Michael from ODDO. Three questions on my side. First one, and just to be clear, the cost initiatives that you mentioned are to be able to achieve the guidance that you indicated in February despite the lower production already factored in by F and P today? Or it’s in case the environment further deteriorates in the coming quarters?

That’s the first question. Second question is on volumes. You mentioned some encouraging comments from your customers. Could you be a bit more specific on that? And then last one on outperformance.

How

Analyst: should we

Michael Fondekis, Analyst, ODDO: think of outperformance in coming quarters with, on one side, probably, geo mix headwinds easing a bit, especially in H2, but on the other end,

Christoph Flaskavi, Analyst, Deutsche Bank: maybe modules growth slowing down a bit? So yes, thanks.

Laurent Favre, Chief Executive Officer, OP Mobility: Thank you for your question, Michel. I mean, for your first question, the the cost initiative we launched is to adapt to what we see today for the second quarter, which which should be solid. But also, it’s is to adapt to to to the scenario of SMP, which is deteriorating the volumes, especially in in North America. And and that is that is that is the best assumption we have today. And that is the the the scenario we are working on and and the reason why we decided to launch additional cost initiatives.

And depending on how the volumes would behave, we will adapt as well those cost initiatives. Regarding the volumes, which are encouraging, it is, first of all, what we delivered in the first quarter, but also the cutoff for April, May and June. Basically, don’t see any deterioration right now based on the tariff. We had some customers who decided to to stop production for a couple of weeks, but they decided to relaunch the production so far. Therefore, we don’t see we don’t see as of today any any, I would say, decrease in in in production volumes in the in the coming weeks and and and months.

And we don’t see our customers changing their their behavior in the in the coming months also. They all want to to to to keep their market share, I would like to say. And therefore therefore therefore, they are they are waiting for the next decision on tariffs, but no no no major major change in term of in term of color for the for the coming months. And regarding the outperformance, I would say it will depend on it. It depend on geography and customers.

We are always outperforming the market since a couple of quarters and semester. Therefore, there is no reason that we don’t continue to outperform the market.

Michael Fondekis, Analyst, ODDO: Thank you.

Conference Moderator: Our next question comes from Thomas Besson at Kepler Cheuvreux. Your line is open. Please go ahead.

Thomas Besson, Analyst, Kepler Cheuvreux: Thank you. Good morning. I hope you can hear me. I have a couple of questions, please. First, could you remind us the visibility you have in terms of customers’ call off?

Can we say you have a decent visibility on Q2, but not much on H2? Second question, you give us a few comments about the profitability by region? Is it fair to say that your North American business is your most profitable business, but at the same time that the dynamic you show in Europe should bode well for recovery in margins in Europe? Thank

Laurent Favre, Chief Executive Officer, OP Mobility: you. Thomas, for for the question. I mean, visibility cut off is eight weeks, basically. That means it doesn’t mean we don’t have visibility for s two. For s two, these are indication, but cut off for eight weeks.

That means for the coming eight weeks, which can bring which would bring us, sorry, to the end of the semester. We have a a pretty solid visibility. We get the new call off each week on Wednesday for for for your information, but that is that is normally binding for the coming eight weeks. Therefore, we are pretty confident for the for the rest of the of the of the quarter and then for the semester. And for the second semester, it’s always based on on on production volumes assumption from our customers.

But as of today, we don’t see changes for the second semester from our from our customers. Regarding the profitability by region, I would say it’s pretty balanced by the different regions. It is also something we have been working on in the in the recent years. Therefore, we have a similar profitability in in America, in Europe, and in Asia. And then it can depend by business group, but but no major deviation by region in term of profitability.

Thomas Besson, Analyst, Kepler Cheuvreux: Thank you.

Conference Moderator: Thank you. Our next question comes from Christoph Flaskavi at Deutsche Bank. Your line is open. Please sir, go ahead.

Christoph Flaskavi, Analyst, Deutsche Bank: Good morning. Thank you for taking my questions as well. The first one will be on Europe. You had quite a strong outperformance there. I would assume potentially part of that being preproduction of some of the OEMs with regards to exports into The U.

S. Did you see that? And could you potentially quantify the impact, if possible, at all? And for Q2, you said visibility is relatively okay. Is Q2 continuing on the same run rate in Europe that you’ve seen in Q1?

Or is it modestly lower, again, relating to potential preproduction? And then a follow-up question to your comments on Mexico. You said because of VW changeovers, essentially, there was the underperformance. Was there any effect as well where you saw production being cut or slowed down because of the tariffs? Or also in Mexico, essentially, change, as you highlighted, for North America overall?

Laurent Favre, Chief Executive Officer, OP Mobility: Thank you for your question, Christophe. No, I mean, Europe, we don’t believe there is any any, I would say, extra production in order to to to to prevent or to preserve for for some tariff. That means we have seen, I would say, a stable production from our customers, but we we launched new programs in Europe, especially for for for Skoda, for Volkswagen this year. Also, the ramp up of some models of Stellantis, which have been delayed in the in in 2024. Therefore, we are benefiting from that.

But, basically, these these are not models which are which are getting exported. Therefore therefore, we don’t see any any push from our customers to to to produce more and to deliver more to The US out of Europe, at least not what is impacting us positively in term of our performance. Mexico, it’s it’s just Volkswagen launching new models in Mexico. Therefore, they they reduced the production of the old model. They launched a new model, and they they lost a couple of weeks of production.

It’s also not due to tariff. It’s just the normal launch of new models, and that was impacting us negatively in the in the first quarter. And to elaborate on Mexico, you you know that that two customers, Audi and and Celanci, decided to slow down their production in q one for a couple of weeks in Mexico based on tariff. But in the meantime, they restarted at a at a normal pace. Therefore therefore, no no major impact from tariff on that.

Regarding the q two outperformance in Europe, as q one was not due to to to extra production to avoid tariff, I don’t see any any any slowing down of Q2 in Europe compared to Q1.

Christoph Flaskavi, Analyst, Deutsche Bank: Thank you. And just one follow-up on the investment measures that you will implement or have started to implement already. Should those impact the H1 cash flow on the investment side already? Or is it more for H2 and optionality that you’re considering?

Laurent Favre, Chief Executive Officer, OP Mobility: It will be H1, not H2.

Christoph Flaskavi, Analyst, Deutsche Bank: Sorry. Could you repeat that? I didn’t catch that. Sorry.

Laurent Favre, Chief Executive Officer, OP Mobility: No. I said a bit h one and more in h two.

Christoph Flaskavi, Analyst, Deutsche Bank: Thank you very much. Very clear.

Conference Moderator: The next question comes from Steven Benemeau from BNPP Exane. Please go ahead.

Steven Benemeau, Analyst, BNPP Exane: Hello, good morning. Thanks for taking my question. I have three questions, please. The first one is on the cost savings. Just a follow-up.

Based on your new assumptions in terms of JVP assumptions, if all else being equal, what does it imply in terms of amount of cost reduction in 2025? And should we expect those cost measures to continue in 2026 and 2027? My second question is on the guidance. So your guidance is now based on the 1.5% of JVP decline. Based on the group geo and clients mix, what does it imply in terms of revenue loss for 2025?

And in terms of tariff, just to be more explicit, I’m not sure if we will understand how it works, the negotiation with your clients. For two third of the directed components, does it mean that there’s automatic negotiation with your clients? And for the remaining part, there’s a negotiation that you have to start with your clients? And where are you in terms of negotiation? And what kind of pass through do you expect with your clients?

Thank you

Laurent Favre, Chief Executive Officer, OP Mobility: for your question, Stephen. I will start with the cost reduction 2025. Basically, we we we have always communicated that we are working very hard on our on our structure cost reduction, SG and A. You noticed that last year, we reduced the SG and A compared to 2023, and that we we had the intention to reduce furthermore in 2025 and also in 2026. What we are doing right now is to accelerate, basically, and to intensify, meaning to to go faster in what we wanted to do.

We are developing kind of a shared service center. What we don’t have right now to do mobility that we are pushing to move faster. And on top of that, we are cutting the cost which are not essential, which are which are mainly essential external cost. I was mentioning before contractors. I was mentioning before consulting and and and travels and so on.

Therefore, you can assume that a big part will be sustainable for twenty six, twenty twenty seven, and that we are only accelerating in in 2025, and we’ll adapt again to the market situation. But that is anywhere trend we are working on since since couple of years to to reduce permanently our our structure cost. We are just accelerating, intensifying, and cutting additional cost, especially external ones I was mentioning before. But we’re gonna target this to make that as sustainable as possible for the coming years to, yeah, to to improve our competitiveness. Rating the guidance, our guidance is based on what we know.

And what we know is for for q two where where we have a pretty solid solid numbers from our customers I’ve mentioned before. And what we can assume for s two, and s two is a mix of our customer information and SMP scenario. And based on that, for sure, the 1,500,000, they are they are of cars less than last year. They are mainly coming from regions where we are very strong, like in North America. Therefore, I’ll let you evaluate the the the potential impact on the on the turnover, but but that is what we are willing to to to compensate with the cost reduction measures I was mentioning before.

We get new tariffs. To explain you a bit, maybe it wasn’t clear. When we produce bumpers or tanks or modules in The US, we also assemble components which have been developed and sourced by our customers. I gave the example of a screen for a cockpit modules. I could have given the example of a radar we assemble on the bumper where the customer decided to to develop, to buy the RADA at the at the supplier a, being located in Germany or in Mexico to a certain price, and we are handing the parts for for for them and getting handling fees.

This is how it works for two third of what we what we import in The US for the production we have there. And for those components, most of the time, based on contract, the prices will be adapted to the currency or tariff situation. There is by contract no risk. Or if the by contract, anyway, by by by in the way we’re working with them, it is it is it is getting adapted. Therefore, we are very confident that we will be able to to to adapt 100% to gross prices for for for the so called directed by components.

For the remaining one, that is a common work we have engaged with our customers since a couple of months, wanted to say. Meaning, how to get commercial compensation for for the short or middle term and how potentially to find other sources for the middle to long term. But but here as well, very confident to find a way that all in all, very close with your discussion with our customers. But we we don’t focus only on short term. We focus on short, middle, long term because some of our customers, they are rethinking the the middle, long term strategy, and we want to be to be their partner if they if they move their footprint.

Therefore, it’s a mix of short term commercial negotiation, very successful so so far, and middle long term strategy discussion with them to to to support them in in their potential footprint adoption to the new situation.

Conference Moderator: The next question comes from Jose Ozymandias from JPMorgan. Go ahead.

Analyst: Thank you very much. Good morning. Few questions, please. Do you think you can improve the outperformance to grow our production in North America in the second quarter? And a little bit what are the reasons behind that maybe the sequential move Q2 versus Q1?

Second, when we think about CapEx, can you give us a bit more color on how you think about CapEx first half, second half? What kind of magnitude reduction you’re thinking in the first half on a year on year basis? And then, three, can you comment a bit on the levers to improve the profitability of the Lighting division? Thank you.

Laurent Favre, Chief Executive Officer, OP Mobility: Thank you, Jose. Regarding regarding North America, we mentioned that we we did outperform the market in in The US in the first quarter by four point, and we underperformed the the market in Mexico for the for what I was mentioning before, model change at Volkswagen, and therefore, showing down of the production. We are confident to to outperform the market in in The US in q two and to outperform the market as well in Mexico in q two. That means to to, yeah, to come back to a normal outperformance of the North American market in in in the second quarter as we did last year and and even more in the second semester. Because this one semester, we should benefit also from new models being launched.

Stephanie did did mention the Austin factory we are in. There are new models being launched right now. New models coming also in s two, and that should that should boost boost our performance in the in the second semester as well in in North America. Therefore, North America will continue to be a very important region for for open mobility. CapEx reduction.

We are targeting a reduction of between 510% for CapEx this year. I would say the CapEx level should be lower in H 1 this year compared to H 1 last year. And it should be, I would say, massively lower in H 2 20 20 5 compared to h two twenty twenty four because we have been, obviously, working hard on that since a couple of weeks. Therefore, the biggest effect would be in h two. But nevertheless, h one this year should be lower than h one last year in term of CapEx.

And all in all, we are targeting five to 10% reduction in term of CapEx compared to last year. Lighting lighting, we it’s it’s a mix of working permanently on efficiency. And and Stephanie mentioned before that we have decided to combine the lighting business group and the and the exterior business group. Therefore, there is a a benefit in term of cost structure, in term of SG and A. We’ll we will save a decent amount of of of money in term of structure cost for lighting and for exterior.

The biggest effect it being in 2026. What we said is that we have some cost in 2025 to restructure, but it will be offset it by the benefit we will have in the second half of the year for lighting. Therefore, some cost in the first half and some benefit in second half. All in all, neutral plus for for 2025, this this combination of lighting and exterior, but but an important benefit in in 2026. That is one of of the the factor for the turnaround of lighting.

The second one is the top line for sure. Stephanie also mentioned the fact that we are we are still suffering from the weak order book before the acquisition in s one. S two should be a bit better this year. And from 2026 onwards, as already mentioned, we will see many launches coming. That is the benefit of the 3,000,000,000 order intake we had in the last two years.

And as you know, between the order being booked and the the production starting, there is about three years delay. Therefore, the the launches will multiply in 2026 and I think, and the the combination of the top line being boosted by that and the and the and the cost structure being reduced also by the combination of lighting with exterior should or will increase the profitability of the of the lighting business. Also, for lighting, I want to also to to you have to confirm that also in q one, we had a a very solid order intake in lighting. That therefore, we we continue to develop this business without exaggerating the other intent because we need to digest that, but to make sure that we will achieve the $1.21300000000.0 of sales in middle term we are targeting. And last topic in ’19, Stephan explained that we we we we we we launched probably forever a kind of integrated offer of lighting and and bumper.

And we we got new awards also recently for that, which have not been announced right now, but showing that the fact that we are able to combine the lighting with exterior parts is giving us a unique position, and that is also something we will value more and more in the coming years.

Christoph Flaskavi, Analyst, Deutsche Bank: Very helpful. Thank you. Thanks, all.

Conference Moderator: The next question comes from Steve Pereira Fernandez from Bernstein.

Steve Pereira Fernandez, Analyst, Bernstein: Good morning and thank you for taking my questions. Just one left on my side. Could you just talk about the European BB sales mix and the impact on Sea Power? What are you seeing from customers? And is that is that a headwind to your CPower business?

Thank you.

Laurent Favre, Chief Executive Officer, OP Mobility: Thank you, Steve, for your for your question. I mean, the the c power, we we said since a couple of years that that we want to maintain this business. We want to consolidate the market in a in a in a market which is declining, the addressable market. But knowing that we are number one in this market, we we believe we have a good chance to consolidate it and and to to maintain a stable level of sales, which is happening in q one. But again, in this in this context worldwide now, I was mentioning that.

And we are consolidating the market, and our market share globally will move from 22% to 50% in the coming years. Therefore, great success on that, and we have, again, fantastic success in The US. In the first quarter, we we formed for very important volumes. Now coming to Europe, our biggest our biggest market now for for c power is not Europe anymore. It’s North America.

That is also where the headquarter of this activity is in in Detroit. In Europe, we are adapting the capacity to the to the market situation. Last year, we we closed two factories in Europe, 1 in Germany, One in France, just to adapt the capacity to to the to the to the to the market development. And when we close factories like that, we we move the equipment to other regions where the market is growing, like India, for example. Therefore, Europe will continue to decline.

We will step by step adapt our our capacity, but we are resisting because we are continuing to get to gain market share in Europe as well. And for to your question, yes, for sure, more BVs, less tanks, less tanks is less c power, More more more market share in Europe is is mitigating this impact. But but nevertheless, this business will be stable in the coming years worldwide. We’ll grow in North America. We’ll grow in Asia except China.

We’ll potentially be stable in in in China, and we’ll reduce in in Europe.

Christoph Flaskavi, Analyst, Deutsche Bank: Thank you very much.

Steve Pereira Fernandez, Analyst, Bernstein: Okay.

Conference Moderator: We have a follow-up question from Thomas Besson at Kepler Cheuvreux. Please sir, go ahead.

Thomas Besson, Analyst, Kepler Cheuvreux: Thank you. Sorry. I just wanted to make sure I understood correctly the figure you you mentioned for the lighting revenues midterm. Did you say 1.2, one point three, or did I misunderstand?

Laurent Favre, Chief Executive Officer, OP Mobility: It’s what I said.

Thomas Besson, Analyst, Kepler Cheuvreux: Sorry?

Laurent Favre, Chief Executive Officer, OP Mobility: I’m surprised that you are surprised, but it’s it’s it’s what I said. Yeah. That is what we are targeting. I mean, we we we booked 3,000,000,000 in two years. That means average is 1.5.

We will book again one point two, one point three billion this year. Therefore, that is that is what would translate in this revenue I was mentioning before in the meantime.

Thomas Besson, Analyst, Kepler Cheuvreux: Okay. Thank you. And my connection is poor. That’s why I was asking to clarify. Thank you.

Laurent Favre, Chief Executive Officer, OP Mobility: Thank you, Thomas.

Conference Moderator: There are no more questions. I will now hand the conference back to the speakers for any closing comments.

Laurent Favre, Chief Executive Officer, OP Mobility: Well, the many thanks for for for your question and and for your attention as well. Again, again, a strong quarter of OP mobility. We are growing in a in a in a flattish market. We are gaining market share in all our businesses. We are having a great intimacy with our customers, which is not about commercial negotiation, not only about commercial negotiation on tariff, but which is about about supporting them in the in the in the strategy.

Strategy. We are developing new customers as well. We are continuing our strategy to be more diversified in term of in term of geography. For the tariff, we have again, I would say, business model, which is exposing us less than the than some competitors because we produce where we sell. Therefore, we don’t have cross borders activities.

And therefore, with the cost measure, have been decide have been putting in place in the in the recent weeks to intensify our reduction of structure costs and to slow down our investment. We are we are very confident to to achieve to achieve the guidance for 2025 in the current market environment. Many thanks for your attention, and talk to you latest at the end of the first semester. Bye bye.

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