Good morning, everyone and welcome to the Lear Corporation Second Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please also note today’s event is being recorded. At this time, I’d like to turn the floor over to Tim Brumbaugh, Vice President, Investor Relations. Sir, please go ahead.

Thanks, Jamie. Good morning, everyone and thank you for joining us for Lear’s second quarter 2024 earnings call. Presenting today are Ray Scott, Lear President and CEO; and Jason Cardew, Senior Vice President and CFO. Other members of Lear’s senior management team have also joined us on the call. Following prepared remarks, we will open the call for Q&A. You can find a copy of the presentation that accompanies these remarks at ir.lear.com. Before Ray begins, I’d like to take this opportunity to remind you that as we conduct this call, we will be making forward-looking statements to assist you in understanding Lear’s expectations for the future. As detailed in our Safe Harbor statement on Slide 2, our actual results could differ materially from these forward-looking statements. Due to many factors discussed in our latest 10-Q and other periodic reports. I also want to remind you that during today’s presentation, we will refer to non-GAAP financial metrics. You are directed to the slides in the appendix of our presentation for the reconciliation of non-GAAP items to the most directly comparable GAAP measures. The agenda for today’s call is on Slide 3. First, Ray will review highlights from the quarter and provide a business update. Jason will then review our second quarter financial results and full year financial guidance. Finally, Ray will offer some concluding remarks. Following the formal presentation, we would be happy to take your questions. Now I’d like to invite Ray to begin.

Thanks, Tim. Nice Job. Please turn to Slide 5 which highlights key financial metrics for the second quarter of 2024. Lear continued its positive momentum, delivering modestly higher revenue in the second quarter compared to last year, exceeding $6 billion. Core operating earnings were flat at $302 million. Adjusted earnings per share, was $3.60, an increase of 8% driven by higher adjusted net income and the benefit of our share repurchase program. Operating cash flow was $291 million in the second quarter and free cash flow was $170 million, an increase of 8% compared to last year. Slide 6 summarizes key business and financial highlights from the quarter. We generated quarterly record revenue of over $6 billion in the second quarter. Growth over market for the total company was 3 percentage points with sales in both segments outgrowing the industry. E-Systems growth over market was 7 percentage points and Seating growth over market was 2 percentage points. During the quarter, we repurchased $60 million of shares and paid $44 million in dividends. We continued to repurchase additional shares throughout our quiet period and have repurchased over $110 million of shares year-to-date. Adjusted earnings per share grew by 8% in the second quarter, driven in part by the benefits of our share repurchase program. In E-Systems, we delivered our eighth consecutive quarter of higher year-over-year margins by executing our focused product portfolio strategy and improving operational efficiencies. In Seating, we continue to see strong demand for our innovative solutions in thermal comfort. Given the rapid commercial adoption of our new products today, we are introducing our ComfortFlex by Lear modular designs as well as our ComfortMax Seat by Lear. ComfortFlex and our ComfortMax Seat will showcase the various thermal comfort solutions that only Lear can bring to automotive seating. We continue…

Thanks, Ray. Slide 10 shows vehicle production and key exchange rates for the second quarter. Global production decreased 1% compared to the same period last year on both an aggregate and Lear sales weighted basis. Production volumes increased by 2% in North America and by 5% in China, while volumes in Europe were down 6%. From a currency standpoint, the U.S. dollar strengthened against both the euro and RMB. Slide 11 highlights Lear’s growth over market. For the second quarter, total company growth over market was 3 percentage points with Seating growing 2 points above market and E-Systems growing 7 points above market. Growth over market was particularly strong in Europe at 7 percentage points with both business segments benefiting from higher volumes up in the Land Rover Range Rover and Range Rover Sport. New conquest programs such as the BMW 5 series in i5 and Seating as well as new business with BMW and Renault and E-Systems contributed to the strong growth in the region. Lower volumes in several Stellantis, Audi and Porsche programs negatively impacted seating platform mix in Europe. In North America, sales outperformed industry production by 1 percentage point, reflecting favorable backlog, partially offset by unfavorable platform mix in both segments. The growth in E-Systems was driven by new business on General Motors Ultium platform, including the Honda Prologue and Acura ZDX. Seating benefited from new conquest business on the Jeep Wagoneer and Grand Wagoneer. Lower volumes on Lear platforms such as the Mustang Mach-E and E-Systems and the build-out of the Chrysler 300, Dodge Charger and Challenger in Seating impacted growth in North America. In China, revenue growth lagged the market by 5 percentage points, driven by lower volumes on Lear platforms such as the BMW X3 and iX3 in Seating and the Volvo XC40…

Thanks, Jason. Please turn to Slide 22. There continues to focus on what we can control and execute on our strategic initiatives. In Seating, we are accelerating the deployment of our Thermal Comfort Systems Products. Our ComfortFlex by Lear modular designs are expected to launch over the next several quarters. Full validation of our ComfortMax Seat by Lear Technology is on track to be completed with Ford by the end of this year. Thermal Comfort business gives Lear a competitive advantage and further strengthens our industry-leading position in Seating. In E- Systems, our execution and focus on efficiencies continues to drive margin improvement. We’ll continue to win new business across all powertrains resulting in strong growth. The acquisition of WIP Industrial Automation was recently completed. WIP strengthens our automation and artificial intelligence capabilities, which will extend our leadership as an advanced manufacturing integrator. The initiatives we are executing will drive sustainable profit improvements and will allow us to continue to return capital to shareholders. We have repurchased over $110 million worth of shares year-to-date and have set a target of $325 million for the year, which will help accelerate earnings per share growth. And now we’d be happy to take your questions.

[Operator Instructions] And our first question today comes from John Murphy from Bank of America. Please go ahead with your question.

Alright. Good morning, guys. Just first question on the Chinese automakers in the market. you said something about being 30% of BYD Seats in a few years. I’m just curious who the other 70% is as far as the Seats that are sourced by BYD, what the competitive landscape is there. And if you see anything different, I know it might be hard to tell between the vehicles that are sold within the China market versus the vehicles that are exported because obviously, exports are going to probably continue to grow pretty rapidly over time. And if there’s a difference in the opportunity set for you in-market versus exports?

Yes. Starting with kind of the breakdown of BYD’s Seating suppliers, they do have an in-house seatmaking company, I believe it’s [indiscernible]. In addition to that, they have a joint venture with Forvia. So I think our book of business with BYD and those two are – the three taken together are the vast majority of BYD’s Seat suppliers if you look out over the next 3 or 4 years. In terms of the content differences, we’re not seeing significant differences at this point in time. What you’re seeing with BYD is a couple of things, manufacturing in China and then for the domestic market and export but also then setting up manufacturing outside of China. So they have capacity in Thailand. In fact, they’re in Hungary this week meeting with our team there, they’re establishing capacity in Eastern Europe. They’re talking about Brazil as well. And I think the way they’re initially entering these markets, mostly through knock down CKD business. And so to the extent we’re supplying that in China, we’ll likely win that business as it moves to the other markets. And then from there, they will ramp up production and manufacturing in those regions. And because of our presence in those markets, we feel confident we’re going to win our share of that business. I don’t think we’ll be the only supplier in those markets, but we will certainly maintain our share with them.

And I think just, John, we were there not that long ago, Frank and I. And looking at some of the vehicles, it’s impressive on the luxury side, what they’re doing with content and features. And I don’t see that diminishing regardless of it’s in China or export really, they’re separating themselves with some of the quality, quality features. And I think that’s where we’ve done a nice job of really getting at growth with BYD is the capabilities we have with Thermo Comfort. I can’t emphasize the importance of having innovation and technology, and they’re very, very focused on ways that you can drive modular solutions, improve features package the features within the seat. And so having that capability, I think, has uniquely positioned us to be as successful as we have been with BYD. And I think even outside of China, looking for that to continue. They really have to differentiate their product, having that type of capability outside of China and in China is very complementary. And so it’s been a great customer. We love the growth. We don’t see that really changing in China or outside of China.

That’s very helpful. And then just one second question, I mean you’re explaining that the lower guide largely is based on market conditions of lower volume, maybe to some extent, mix. But there’s definitely some programs that are being pushed down and to the right, particularly on EVs. I’m just curious how much disruption that’s creating your business, how much that may be adding into sort of the incremental pressure here in the short run? And how you think about that in 2025 and beyond because you’re being pretty polite not calling that out too much, but I would imagine that’s a bit of an issue?

Yes. We’re certainly seeing the disproportionate share of this adjustment to our revenue guidance being driven by lower volumes on electric vehicle platforms. And I think it’s roughly 65% of the revenue reduction is driven by lower volumes on those platforms. And those are a combination of programs that we’re ramping up this year that are now ramping up more slowly and those that are getting pushed out even out of this year. And then also programs that are in production that are now running at a lower rate than they were last year. And so some of the serving OEM EV programs that launched last year and the year before, we’re seeing lower volumes on this year. In terms of how it impacts our business, it really depends on the customer and the program. We have certain customers where they’re producing EVs and ICE vehicles in the same footprint and we are as well. And in those cases, we’re able to adjust much more quickly. And our component plants, the same thing. We are generally producing components for ICE EV vehicles, and we’re able to move headcount, were not hire as quickly to adjust to the lower volumes. The exception to all that, some of our – the dedicated capacity we put in for some new EV plants, and that’s where you’re seeing perhaps maybe a little bit more decremental margin impact on those platforms specifically.

Very helpful. Thank you, guys.

Thanks, John.

Thanks, John.

Our next question comes from Joe Spak from UBS. Please go ahead with your question.

Thank you. I guess just to start for the ‘24 guidance. I know you’ve taken a more conservative view here than prior. I think you’re even more conservative than current S&P. But we’re seeing OEMs announced production cuts by the day, really. So how should we interpret what’s in your guide here? Like are some of these announcements that we are seeing and we’ll likely to see over the coming months, you think already embedded in your plans? Or should we expect potentially more risk if we see continued production cuts?

Yes, Joe. We spent a lot of time on this over the last several weeks, as you might imagine. And our adjustment to the second half outlook was greater than what we had anticipated and communicated at public investor event in mid-June. And that really reflects the kind of the ramp-up and announcements and also our extrapolation of what that may mean into the fourth quarter as well, particularly on electric vehicle platforms where we’re just seeing a slower ramp up in slower demand in the U.S. and Europe, in particular. And so we’ve tried to capture not just what’s been announced, but what we anticipate to be announced as the year progresses. And at the midpoint, we’ve tried to capture a balance of that risk as well as some upside on platforms that are doing particularly well. For example, in China, and a number of our Chinese domestic OEM platforms, like the Xiaomi SU7 leap motor, we’ve increased our volume assumption, reflecting the strong sales performance that they’ve seen in the market. So it just depends on the customer, the car line in the market. but we’ve tried to be very balanced. And I wouldn’t characterize the midpoint is unduly conservative or unduly aggressive at this stage.

That’s very helpful. And then maybe just to follow on a little bit from John’s question. So we’ve obviously seen the slowdown in EVs where new programs proceeding where a large part of your backlog. I think overall, that was also expected to drive E-Systems. We’re seeing just other production cuts in the industry from some higher inventories. So when we put it all together, like I’m just thinking out here, like how do you actually view the growth algorithm for Lear over the next 1 to 3 years? Because it would seem at the very least, and I know you’ve already sort of done this once, like there needs to be a revision to some of the – a further revision to some of the backlog commentary you had prior. So I’m just curious if you could help us a little bit on how you’re thinking about the next couple of years here?

Yes. If you look at E-Systems, what we talked about previously is that about half of our 6 points of growth over market was driven by the added content on electric vehicles and our participation in that market transition. And so clearly, that piece of the 6 points has slowed down. Despite that, we have grown 6 points over market including this year on a 5-year running basis in E-Systems. And we expect this year to be 6 points of growth over market despite the pullback in this transition to electric vehicles. So growth is holding up, clearly any systems because we’re winning business on the low-voltage side on ICE vehicles and taking share there as well. And I think that’s a factor. In Seating, I think there’s a little bit more near-term uncertainty because the weighting of EV platforms that are in the backlog and ramping up a bit more slowly. And so our growth over market this year in Seating is more like 2 points roughly for the full year and 3 percentage points in the second half of the year. And so the question that is unanswered, and we’re seeing some evidence of an answer forthcoming is how many extensions will we see in ICE programs as the slowdown in EV ramp-up continues. And we are starting to hear more discussions or participate in more discussions with customers. We’re not prepared to front run their commentary in this regard, but we are seeing more evidence that there will be ICE extensions that will help sort of backfill that lower revenue growth attributed to the new EV vehicle. So ultimately, I think the bigger question on sales growth is going to be what is it – what happens with industry demand overall. And that will be the key factor determining the pace of growth in both segments with in the near-term. Longer-term, we continue to take share in both segments, and we see a strong backlog in both segments and believe that we can grow both segments consistent with our target rates, 4 points in Seating and 6 points in E-Systems over the next 5 years. And so we’re more confident as we see it today than even in the past in Seating really because of the thermal comfort traction that we have with customers and how that’s contributing to our competitive advantage in Seating and our strength in our E-Systems business and the cost structure in that business, allowing us to take share there. So I think the growth story longer-term is intact, I acknowledge that in the near-term, it’s a little bit bumpy.

Maybe one quick follow-up. I don’t know if there is a new answer to this, but like in the original backlog, where let’s say, seeing for example where you’re seeing a lot of new programs for EV, what was your sort of high-level assumption for ICE declines at that time?

Yes. It depends on the customer and the region. There isn’t a straightforward answer that could provide you, Joe, in the constraints of time on this call, I need a half hour discussion on that.

Okay. We will take it offline. Thanks.

Thank you.

Our next question comes from Dan Levy from Barclays. Please go ahead with your question.

Hi, good morning. Thanks for taking the question. Wanted to start with a question on Seating and just the margin trajectory. So recognize the volume mix pressure. But really, the question is – if you’re guiding 6.3 for the back half of the year, is that really a starting point for 2025? And maybe just more broadly, look at your Seating Day a year ago, you were talking about a path to 8%, 8.5% over time. And I recognize a very different industry today, mix is softer. The backlog has been impacted. There’s some FX and inflation. But really, the question is what’s the path to getting Seating margins back on track? Is there any benefits from TCS or Vertical Integration. Maybe you could just talk about the broader trajectory of ceding margins? And if there’s anything beyond just the program launches and customer mix.

Yes. Dan, I’ll start with the first part of that question. I think if I’m modeling 2025, I would use the full year guidance proceeding at the midpoint of 6.5% as opposed to the second half margin guidance to – at the launching point into next year because you’re really seeing a concentration of this volume reduction in the third quarter. You have extensive downtime in North America and Europe, much more so than we saw last year. And we’ve built in a slower production into the fourth quarter across a number of our car lines. So I think that 6.5% is a better starting point. If you look at what we’ve done this year, we’ve generated positive net performance of about 20 basis points in the first half on Seating. We expect to do that again in the second half, we’re seeing 10 to 15 basis points of margin growth from our backlog. And so as you fast forward into 2025, I would expect both of those to continue. And I would argue that we are poised for that net performance to accelerate beyond the 20 basis points that we were able to achieve this year because I would characterize this year as sort of the peak wage inflation impact and also a pretty significant peso headwind that will diminish considerably certainly, if the rates hold up where they are right now. And what we have done in terms of these investments in WIP and other advanced manufacturing automation systems and integration companies will allow us to really accelerate the labor cost reduction and manufacturing cost reduction over the next several years. I would characterize what we are doing with automation has been sort of in the second inning of the game here. You are seeing the initial benefits we talked about reducing headcount by 8%. Seating revenue is only down less than 1% for the year. So, pretty impressive performance, and the vast majority of that’s already been completed. As you look out to next year, we see more opportunities to do that. And then if you sort of get past the next 2 years of say, 50 basis points of backlog and net performance improvement a year, I think you start to see the full benefit of the TCS margin enhancement over a longer period of time, driving both revenue growth, but also improving margins in that third year, fourth year and fifth year of the 5-year plan we are building right now. So, those would be the kind of the building blocks I would think about.

Got it. Thank you. As a second question, I wanted to ask about the E-Systems margins. And really so see the offsets that you are talking to recognize there is some seasonality. But wondering what is the line of sight that you have on the efficiencies and negotiations that you have in place there, recognizing that the EV impact on E-Systems is probably higher than what’s going on in seating?

Yes. I mean if you look at sort of the first half to the second half, what we are guiding to is more than offsetting the impact of lower production volumes. So, the volume impact first half to second half and the revenue reduction is actually a smaller impact in E-Systems than seating based on just platform mix. But we are offsetting that through a combination of commercial negotiations, the vast majority of which we either have a line of sight on or are completed. There are some that are still ongoing that we have to work through, but our confidence level is high. We have lower engineering launch costs, in E-Systems that’s more a reduction in launch costs than it is engineering. We have a clear line of sight to that, just given the cadence of our launches this year. We have significant improvements in our North America wire business that we have guided to a 30 basis point improvement sequentially on. We are seeing those happen into the third quarter. The first quarter was the low point. We saw improvements throughout the second quarter, still not happy with the performance there, but it improved nonetheless. Those improvements and efficiencies continued into the third quarter. And so you are going to really see a nice benefit both in the second half versus the first half, but also next year versus this year since we had such a slow start to the year there specifically in that part of the business. And then the last driver is really restructuring savings in automation. And so we continue to have opportunities to shift headcount from Eastern Europe to North Africa, from the border of Mexico to the interior Mexico, and then from all parts of Mexico into Honduras. And so that’s the last sort of contributor to it. So, we have a clear line of sight on what we need to do to meet that midpoint guidance and hope to do better than that in the second half of the year.

Great. Thank you.

You’re welcome.

[Operator Instructions] Our next question comes from James Picariello from BNP Paribas. Please go ahead with your question.

Hi. Good morning everyone. My first question, and I imagine the situation is highly fluid, but can you share any thoughts on the very recent UAW strike affecting on your seating plant site. I did come across an article this morning that pointed to the possibility of a tentative deal already getting reached. And just on that point, is – does your guidance embed anything one-time in nature in terms of labor contribution, just whatever you could share on this? Thanks.

Well, yes, we did reach a tentative agreement, hoping to get it ratified sometime in the near future here. I work closely with the UAW. And as far as any other information on that, we are going to just continue to work with the team on the ground, but we have – they are back to building vehicles this morning. So, we couldn’t be more happy for GM and our employees done in Evansville [ph].

The costs associated with the contract I reflected in our guidance.

Got it. Okay. That’s helpful. And then – and great to hear. What’s assumed for your Mexican peso exposure, I believe previously, you were assuming a $60 million headwind?

Yes, still roughly the same. We had 85% of that hedged. And if it holds up at 18%, 5th year whatever it was the trading at this morning, there is a modest opportunity in the last several months of the year, but it’s just on that 15% that’s un-hedged. So, our annual exposure is $1.2 billion, so about $100 million a month. So, you can figure out from there the potential mix based on your call on the peso, but I would suggest it’s a modest opportunity for us at this stage.

Thanks.

Thank you.

And our next question comes from Itay Michaeli from Citi. Please go ahead with your question.

Great. Thank you. Good morning everyone.

Good morning Itay.

Just two questions. First just on Slide 17, and thank you for all the detail on the $285 million backlog. Can you mention how much of that is just your EV volume as opposed to deferrals into 2025? And then on some of the potential ICE extensions that you alluded to earlier, and able to roughly kind of quantify if those were to come through what that might mean for the 2025 backlog opportunity?

Yes. Just starting with the EV impact, so of the $285 million, roughly $250 million of that is on EV platforms. And we are in discussions with our customers. Obviously, our customers are deep in their planning process. We would expect to see some of that shift into next year, but again, I think the reoccurring theme we are hearing from customers is it’s going to depend on the demand. So, the ramp-up will be dependent on that. But I would say that the ‘25 backlog would benefit from the shifting of some of that volume from ‘24 into ‘25. Now, at the same time, there may be some risk to the ‘25 layer of backlog that’s – that we have guided to previously for the same reasons that we have adjusted downward our backlog this year. And we are just in the kind of middle of that planning process for next year. So, we will have more to say on that as the year progresses. In terms of the ICE, offset to that, that’s also, unfortunately not a number we can quantify at this stage, it’s more of a theoretical opportunity, but we do anticipate that, that will sort of be a one-for-one opportunity if the industry demand holds up overall and just simply shifts from EV to ICE that our customers will figure out a way to satisfy that demand by either continuing ICE programs that they had planned to build out or increasing the volume on those that they plan to reduce.

That’s very helpful. Thank you. Just a quick second question with the deterioration in the LBP environment, just in the last few weeks and months alone, I am curious if you are seeing any signs of distress across Tier 2s or any other issues across the supply chain?

At this point, we are not seeing any significant change. I would say that over the last several years, there has been issues with supplier bankruptcies and distressed suppliers, but it hasn’t been material to the results. I think one of the benefits, particularly in seeing being so vertically integrated is that we have the ability to bring that business in-house, and that’s oftentimes a helpful lever to be able to pull in that situation. But we are not seeing significant signs of distress or change in that environment.

That’s very helpful. Thank you.

Thanks Itay.

And our next question comes from Mark Delaney from Goldman Sachs. Please go ahead with your question.

Yes. Good morning and thanks for taking the question. Hoping to better contextualize some of the efforts that Lear has done within automation, including the recent WIP transaction. And as you think about some of the steps the company has taken, including with that deal, what does that mean in terms of what Lear may be able to achieve in terms of the high-single digit margin target it has both for seating and E-Systems over the intermediate to longer term? And does this deal suggest that inflationary pressures would have prevented you from getting there without incremental actions or perhaps is there some opportunity for margins to be a bit higher in the longer term as you focus more on automation?

First of all, we recently made the announcement, we set the organization up for even more focus on what we consider to be IDEA by Lear, which is the innovation, the digitization and engineering and automation of how we are driving our businesses. And I think it’s important, and Jason mentioned earlier, we are seeing continued improvement. So, how we are outpacing the efficiencies in our plant relative to even the revenue downturn in seating is a great example, and we have the very similar examples in E-System. So, we are able to really drive operational excellence at a plant level through technology innovation. And these acquisitions we have made through ASI, InTouch, Thagora, most recently with WIP, and our own organic capabilities is really driving results in our plans. And we have examples where we are able to automate even in our seating facilities from finance all the way to delivery to the customer, 100% automation and so those types of steps. And I call them they are implemented at a level that we are still validating and really accelerating those across all of our plants over time, and that’s over the next several years is really going to drive, I think even better results than we are seeing even today. And so right now, it’s about the continuation of expanding our capabilities in those areas, building a very – we have a technical organization around those and really driving those results, connecting the dots between the different plants. I think the second part of that, which I think is very important. I mean we have some short-term churn bumps whatever you want call it, within the industry. But this modular concept of how we are revolutionizing, how you look at seating is very important and is connected to…

And our expectation is that over time, we will more than offset wage inflation through these actions. And I think you see evidence of that in the positive net performance in both businesses this year despite very high wage inflation and the impact of the peso.

Thanks. Very helpful. Another question I had was thinking about your JIT market share. As the company has been making investments in things like modularity, offerings like thermo comfort, those weren’t just good standalone businesses, but I think contributed to perhaps gaining some JIT shares. So, maybe you could update us more globally, how you see your JIT share tracking to – relative to your longer term expectations? Thank you.

Yes. We are still on track to achieve our longer term 29% market share goal in seating. And I think thermal comfort is a key enabler to that. And it’s not just growing the JIT business, it’s also growing the component businesses as well. And so we see that as an additional not just earnings catalyst, but revenue catalyst longer term.

And it does benefit us when we are quoting JIT business with a modular approach. We are much more competitive, much more efficient, and it gives us an enormous amount of flexibility to our customers. And we are already seeing the results, like I mentioned, earlier that the system itself is so much more efficient. I mean one, we are cutting down 50% of the – what was a traditional design system. It’s integrated. It’s automated. The actual output itself from a customer’s preference is changing dramatically. The improvements from airflow in lumbar and massage and those type of features. And so on the just-in-time side of it, we have a competitive advantage. We can be much more efficient in our quoting process. And what’s great about that system, we designed it with the intent to be agnostic to any frame system. So, we can supply that to other JIT manufacturers. And that was intentional that the value proposition within the modular system itself is still capable of being supplied to our competitors now that we want to supply it to them, but we can. And it was designed intentionally that we can build that around any structure. And so we are seeing it. I think that, like I said earlier, with BYD, some of the new entrants, they are not as traditional on some of the supply chains and the way they have been designing much more open to this type of concept. So, it’s been very beneficial in how we are growing globally with some very strategic customers.

Thank you.

Thank you. Okay. I think that’s the last call. So, just I think the where employees are on, just one again, thank you for your incredibly incredible great job you have been doing the hard work. We have a great strategy. We talked about it with Nick’s leadership now in E-Systems. Carl’s leadership with IDEA by Lear and Frank continue to drive seating to simplify the product portfolio in E-Systems. We are seeing great results right now. We are growing the business. It’s very profitable, very diversified across customer, different customers around the world. So, thank you for your efforts here in E-Systems, seating, continue to do a great job. We are going to continue to push these modular concepts. They are working. They are doing a great job of growing our business, our backlog it’s going to drive a value proposition, not just for Lear Corporation, but for our customers and we are doing a really nice job with these acquisitions and Industry 4.0 with IDEA and are going to connect those dots much quicker and get at those results. So, I appreciate all the hard work and look forward to us continuing through the second half. Thank you.

Ladies and gentlemen, with that, we will conclude today’s conference call and presentation. We thank you for joining. You may now disconnect your lines.