Good morning, I'm Kris Doyle, Director of Investor Relations for Visteon. Welcome to our Earnings Call for the First Quarter of 2020. Please note this call is being recorded and all lines have been placed on listen-only mode to prevent background noise. Before we begin this morning's call, I'd like to remind you, this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various factors, risks and uncertainties that could cause our actual results to differ materially from those expressed in these statements. Please refer to the page entitled, Forward-Looking Information for additional details. Presentation materials for today's call were posted on the Investors section of Visteon's website this morning, please visit investors that visteon.com to download the material if you have not already done so. Joining us today are Sachin Lawande, President and Chief Executive Officer and Jerome Rouquet, Senior Vice President and Chief Finance Officer. We have scheduled the call for one hour and we'll open the line for your questions after Sachin's and Jerome's remarks. Please limit your questions to one question and one follow-up. Again, thank you for joining us. Now I'll turn the call over to Sachin.

Thank you, Chris and good morning everyone. Before I start with the presentation, I would like to acknowledge the hard work and commitment of our employees during this unprecedented time. Despite the disruption caused by the global outbreak of COVID-19, Visteon's first quarter sales were $643 million, down 12% year over year excluding the impact of currency, while global production volume declined 23%. We were able to maximize our sales first by successfully mitigating the supply chain disruption in China to keep our global customers up and running. And secondly, by launching 13 new products across multiple OEMs in the quarter. Adjusted EBITDA was $33 million on 5.1% of sales compared to $41 million or 5.6% last year. Our profitability was impacted by lower sales, which were partially offset by the non-recurrence of 2019 operational challenges, cost performance, and lower net engineering, which was down 13% year-over-year, excluding currency. We won $800 million in new business in the quarter, which is an exceptional performance given the circumstances. Most of the new business was for new digital products, including digital clusters, SmartCore and displays, which reflects the successful pivot we have made towards next generation digital corporate technologies. These are uncertain times for the industry, and we are taking several measures to ensure that we have sufficient liquidity to withstand the crisis. The drawdown of the revolver, we now have $825 million in cash and a net debt last 12 months EBITDA ratio of negative 0.2. By reducing all expenses in the near-term by looking at ways to emerge stronger from the crisis through structural improvements, we plan to reduce our capital expenditures by 20% and have temporarily reduced compensation across the board. I'm proud of the discipline and dedication demonstrated by the Visteon team in focusing on execution despite the…

Thank you, Sachin and good morning everyone. Our top priority is the safety of our employees followed closely by our constant focus on ensuring that Visteon weathers the storm and emerges from the crisis as a stronger company. On page 11, we provide an overview of some key balance sheet items as well as the proactive measures we are taking to actively preserve cash and aggressively adjust our cost base. Visteon has entered this crisis with one of the strongest balance sheets in the industry. Cash at the end of the quarter was $825 million, which translates into a $41 million net cash position and a net debt to trailing 12-month EBITDA of negative 0.2 times. In addition, the majority of our debt including our term loan and the revolving credit facility does not mature until 2024. To protect our strong balance sheet, we are proactively taking actions to preserve cash. As such, we are targeting a minimum 20% reduction in capital expenditures for the full year compared to 2019. A large portion of our CapEx is related to new programs as such, was striking a balance between reducing their term investments while ensuring we continue to support future program launches and therefore Visteon's future growth. Working capital management as also being at the center of our activities very early in the crisis and our performance was solid at the end of Q1 with working capital balances below 5.5%, when annualized as a percentage of Visteon sales. As COVID-19 began to impact businesses in China, we set up a global task force to manage inventory levels. First, focus on ensuring supply continuity outside of China Then quickly pivoting to reduce inbound orders throughout the rest of the world as customers were progressively shutting down. We have also been working in…

[Operator Instructions] The first question is from David Leiker with Baird. Your line is open.

Good morning. Can you hear me now?

Yeah. Good morning David. Go ahead, we can hear you.

I was trying to figure out how to do all this new stuff that we do. I want to focus on one thing from a couple of different angles and they literally could probably keep you here all morning, but we look at the new business number, clearly below trend, clearly some disruptions in the process of engineering contract award biddings and things like that. Can you characterize that how much new business wins you might have lost in the quarter because of some of these disruptions. Because I think people are going to focus on that number versus a run rate that you've been had and obviously this is a lot lower. But if you can help bridge that in some context, it would be great.

Absolutely. So first of all, David, I would say that $800 million of new business wins under the circumstances is a pretty decent performance. And as you know, new business wins tend to be lumpy as quarterly pursuits vary and they vary quite widely from quarter-to-quarter. Usually, we see anywhere between $2.5 billion to $5 billion of opportunities in a quarter. And our win rates tend to be somewhere between 30% to 40%. Now, even before the crisis, Q1 was expected to be the lightest quarter in 2020 and every successive quarter has more opportunities. And the third and the fourth quarter is where we see most of the decisions for awards to be made. Now keep in mind, this is before any of the crisis related impact. Now in Q1 on account of all of the restrictions that we had to work around; we saw roughly I would say about $300 million of impact to our new business win number. Now on top of that, perhaps not as well appreciated, is the impact of lowered volume expectations in the outer years. And that's about 10%. And so, if you look at all of these impacts, I would have expected us to be somewhere between $1.3 billion to $1.5 billion in new business wins in Q1, if COVID was not to happen. Now that's still in line with what we have done in previous quarters, this time of the year, but certainly not too far off and we would expect the later quarters of the year to be the larger quarters from new business wins viewpoint. Fundamentally, we don't see any change even now. Even as we talk to our customers, despite all of the restrictions work-from-home et cetera, there's still a lot of attention on the same technologies and trends that we've been talking about for the digital cockpit. So, we don't see a fundamental shift as yet. But Q2, we do expect to see some delays simply because the attention right now is on restart. And a lot of energy is going into that. But we expect to be able to catch up in Q3 and Q4, maybe not to the full extent. But these opportunities, I don't believe are going anywhere, as the industry has a need to upgrade the technologies in the cockpit. And the days of analog gauges are done. It's about multiscreen, multimodal touch, voice interaction and user experience. I'll just give you a quick anecdote, we are in the final stages of developing a system, a smartphone system for a customer in China. And we were surprised to find out that they were doing all of their testing exclusively via voice, even though the system has a touch interface. That's where the industry is headed. So, we don't believe that we will see a sudden change in direction from the larger displays, voice modalities, connected in applications coming into the cars. So, we think it should continue.

And then just one follow-up on that, the other piece of this equation as it seems like every day or every other day, there are announcements about new product program launches and we've been through multiple cycles here and times like this. Everybody is trying to conserve cash and one of those is a push out new launches. Can you characterize, I know it's early and I know it's hard. But is there any way to characterize the impact on the backlog converting the revenue and how much of that might be pushed out or how we should look at that?

Yes. So, this year 2020 was also our year of the highest number of new launches over the past three to four years. If you look at our prior performance, on an average we have been launching about 50 new products each year. This year, when we started the year, we had 64 launches in 2020. Now - and 13 of them in Q1. Q1, we were able to work around the restrictions in China. It was really felt only in China. And we were able to work around the stoppages and still launch all of the products. And then Q2 and Q3 and Q4 have higher number of new launches. We are expecting delays on account of COVID, anywhere between two to three months. But most of these will be still contained within the year. What we have been informed so far out of the 64, is that four launches which were at the tail end of the year, or towards the end of Q3 and Q4, those four launches are being pushed out to 2021. But we still have 60 launches that are at this point in time on track to be launched yet this year. So, we don't believe that there will be a significant delay simply because these programs are at a point where it doesn't make sense for the OEM to delay them any further. A lot of investment and effort has gone into them. And they need this fresh product out in a highly competitive environment as and when they start to come back. So, don't really expect to see a huge amount of change. What we do expect is some product that was expected to launch say 2021 and 2022. There might be some level of adjustments being made some portfolio pruning on the vehicle models that we might see. But those are still in early discussions. We expect OEMs to be going through those discussions internally now. And we will only know in a few weeks' time here as to how that might look like.

Okay. Awesome. That's perfect, exactly what I was looking for. Thank you.

Thank you.

The next question is from the Dan Galves with Wolfe Research. Your line is open.

Hey, good morning. Thanks. So, your revenue in Q1 was 13% below Q4 levels. Can you talk to us about how much lower your headcount was in Q1? And looking forward, how do you think about actions to resize the cost structure to what you anticipate might be production rates and demand once the industry restarts?

Sorry, yeah. I'll let Jerome address this question. Go ahead, Jerome.

Good morning, Dan. Thanks, Sachin. So, 13% down versus Q4. It's very similar to what we have as well versus prior year. So, I think Q1 was a fairly solid quarter in terms of execution, we were able - pretty early in the crisis to adjust our costs. We had as well previously or prior to the COVID-19. We had as well taken actions like restructuring actions to reduce our cost base. So, the good decremental margin percentage that we have 20% is a combination of both what we had done before COVID-19 and as well, the quick actions we took after COVID-19. Going into Q2, obviously, volumes will be much more severe in terms of decline that what we've seen in Q1. So, we are actually expecting decremental margins to be in the high 20s and we are integrating obviously the higher volume declines. The impact it has got on the fixed costs, but as well, all the actions that we are taking headcount, but as well, salary reductions, which are short-term actions, as well as the longer-term actions that we're taking in terms of restructuring.

Okay, great. And could you just give us a sense of over the last couple of quarters of launches on the profitability side, is there anything you can tell us on how the launches are performing from an incremental margin standpoint and launch costs versus actions?

Right, if you go back to last year's performance, we remember the first quarter where we had this launch challenges with a display product of which we had to work through pretty much in the first half of the year. Since then, our performance has been on track. We have not seen any issues with launches. Having said that, I think you understand that the launch margins tend to be lower than the margins of more mature product. But that's very normal. And we expected, so we have not seen any issues. And the same goes for the launches that we've had in the beginning of this year, as well.

Great, thank you.

Thank you.

Thank you.

The next question is from Joseph Spak with RBC Capital Markets. Your line is open.

Hi, thanks. Good morning, everyone, hope everyone's okay. I guess just to start maybe a couple things on China. I thought you mentioned that you felt there was a little bit of an impact on your growth or outgrowth from an inventory build. I was wondering if you could quantify that impact in the first quarter, because obviously that should reverse in the second. And then, last year as well as we all know, you benefited from some higher take rates in China, which I think was a promotional offer to help to move units. Do you think there is a possibility such programs can return in 2020?

Yes, let me address that. And let me go back a little bit in terms of our market outperformance and what have you seen this quarter. So, as you know, our market outperformance actually started in the second quarter of last year, and continued into Q3 and Q4 last year, and we were expecting at the beginning of this year to continue that into 2020. And January started on track, as we were expecting with a double-digit growth that month. And in February, we had to react to the shutdown that happened in China and a lot of our focus at the time was to as we were shutting down in China secure enough supply of raw materials to keep our customers outside of China up and running. And then just as quickly as that was starting to get some level of control, we had to face another change and pivot to slowing down on the receiving of the raw material inventory as the rest of the world started to go into a shutdown. So, what we did towards the end of March, because most of the OEM started to shut down sometime middle of March, and through the rest of the month, we were still able to ship approximately a week's worth of product, even though the OEMs were shut down. And that is the inventory we expect to be sitting at our customers plants, and when they come back and restart that they would be able to use that. So, we would not necessarily be required to ship product ahead of them starting their plants. And we're starting to see some of that activity happen in Europe as they are ramping up their engine plants and then their plans to start their assembly plants. We expect to see some inventory that's already sitting there that would impact us in this quarter. But it's roughly about, I would say two to four days' worth of production from outside of China that we expected to roll back. So hopefully Joe, I think that that was your question. Now with respect to the, specific promotion in China with SGM, SGM had a couple of vehicle models that needed the promotion and we saw the benefit of that in 2019 this year. They have discontinued one model and the second model that is still in production has, I would say more normal levels of take rate of that specific product on that with the customer. However, I should say that even in the first quarter, we are seeing an increase in take rates with a broader set of customers in China, especially digital clusters that we expect to see continue through the rest of the year. And as the market is still somewhat depressed, we do expect that the vehicles would be up contented with digital clusters that should help us for the rest of the year.

Thanks. The second question is, and you touched on this a bit, I was wondering if you could expand on a little bit more to how customers are really thinking about UI, UX changes in the wake of COVID. I mean it doesn't seem like you think they're rethinking screens, but to your point, maybe adding voice, maybe gesture. You can also sort of think about maybe additional functionality like, maybe driver or passenger health monitors might be more important. So, I just want to think about how you guys are thinking about that. How you can participate in what your customers have sort of talked about?

Right, right. So, the way I would characterize it is that the broader trends are still ongoing. And so, the displays are getting larger. That is a drive towards more safety features level two, level two plus driver monitoring. But the overall theme that we are now starting to hear is of course cost and more than ever, the development costs, not just the product piece, price cost. So, the big shift I think is that the amount of money that's going to be spent on building technologies and products is the one that's going to come under more scrutiny. And so, suppliers will require to figure out of the way that you can develop this product without spending the high amount of engineering costs. That used to be the case earlier. And that's exactly what we have been anticipating even prior to COVID. Now we didn't realize that it would happen on a count of COVID necessarily, but the whole move towards platforms is exactly designed to serve that particular point, which is that we should be able to reduce the cost of engineering and developing the products below where it is at today. As an industry, we spent far too much money in the custom development of whether its infotainment or clusters or displays and not making use sufficiently enough of a platform approach. And that's the big shift that we see. We also see the drive towards integration of many of these district products such as driver monitoring. Great example where there is a push towards introducing that feature, but that's an incremental cost in this time there's going to be a very difficult proposition. So that's one thing. Now with respect to infotainment, I believe that there is going to be a bigger shift towards more open platforms like Android and the days of custom infotainment might finally be now over that, the impact of COVID. So those are the general teams. This is still early days Joe and I think we will learn a whole lot more, but that's what we feel at this point in time.

Thanks.

Thank you. The next question is from Brian Johnson with Barclay's. Your line is now open.

Thank you and good morning. Good afternoon. A lot of good questions got answered before. I usually like to do the more strategic ones, so I'll get some of the financial ones. So, if we kind of think about this, I know you don't want to give guidance, but I'm just trying to think through a second half where maybe China is closer to normal let's call them 15%. Europe is off significantly cold 30% to 40%. In North America, which as we pointed out on the supply side is just as uncertain demand side is down. So, if we're kind of looking at, let's call it a global production environment, down 25% to 30%. How do you think about your margins in that and sort of resizing to a global production base that feels more like 2011 to 2012 then like, 2017 and 2018?

Right, Brian, let me start and then I'll ask Jerome to also step in here, but they're looking at it in two different perspectives. First of all, our internal planning is exactly assuming a scenario where production can be down by about 30% for the full year. So, in some sense, we are a little more conservative than where IHS is today on and so we are looking at our costs. We have several actions that we have already taken and some underway to drive our cost structure down. But at the same time, we want to make sure that we protect future growth. So, it's that balance that we are trying to strike between how do we protect our growth and we actually see this as an opportunity, as we are, I believe, much more nimble than many of our competitors. I believe we are in a much better position with respect to the technology as well as the cost associated with it. That we should be looking at this as an opportunity to take market share, and not just focus on the very near term. So, it's that balance that we are trying to strike. So, if you look at our costs, besides the cost of the raw materials that go into the product, we have manufacturing and engineering as the two big cost elements. So, there's a tremendous amount of focus right now on aligning manufacturing, because that's the one that's going to be impacted most in the near-term. And we have a lot of different strategies to reduce our manufacturing costs, fixed costs to align with the new production levels. Then when we look at engineering, we have a very strong focus internally on a couple of directions, number one, to move our cost structures to lower cost places. And the second is to use a platform approach, and I can't emphasize the platform approach enough and what it means is that we should be in a position offered to OEMs a ready to deploy product at much, much lower cost than what they are accustomed to today. Now to be able to do that, they would have to also accept certain restrictions, and not be demanding in a specific and unique feature to them as much as they used to do in the past. But even that we should be in a position to support to a certain extent. So, that's the general direction that we are getting organized to, to set up the company in and I will ask Jerome to jump in here with maybe more of the....

Yes, thanks Sachin. If I can maybe add two points. The first one is that very early, we took some actions on the restructuring side. So, in fact, before COVID-19 started in January, we announced one plan and we then announced the second one in March. So, the idea was really to adjust this cost structure that session was talking about and get already some benefits in this year and it will be largely Q3 and Q4, and will help us mitigate some of the volume declines, which now which in our some of our scenarios are pretty, pretty steep, as mentioned. The second thing, I just would like to come back on engineering we, we were able to reduce engineering year-over-year by about 13% in Q1 and we see this continuing as well with again, all the actions we're taking long term and short term, we should be able to get great benefits from a cost standpoint on the engineering side. If you just look at Q2, we don't see any further increases in engineering if anything, we'll see a lower level in Q2 and that's at a high level will give you a 20% year-over-year decrease for just Q2 on the net engineering side. So, early actions and benefiting manufacturing as unit but as well. Obviously, engineering

Okay, and just back to Sachin’s comments about platform, because certainly I have remembered the great work you did at Harman, last decade on moving the platforms. I think how far long is the software and hardware platformization if you will at Visteon, what’s left to do, and is a more question of getting of OEMs onboard or do you have additional work to do to get a customizable platform?

Yeah, we are in a very good position with infotainment and the reason for that, is that, we didn’t really have a big legacy of infotainment that I had to work through after I came here. So, by the way the first product just got launched yesterday using that platform with VW. It's actually now available in terms of the public launch information. So, it just went live in Brazil with VW. Very proud of the achievement of the team there. So very good position with infotainment and we’re making a lot of progress with instrument clusters, digital instrument clusters. Now the challenge here was - because we have a very broad set of customers, we have many, many programs and the implementations very widely from OEM to OEM. So, we have put together a team and the goal is we will launch our first platform of based cluster program. Majority of the work could be done this year and then every successive cluster that we built will be built off of that platform. And that’s going to represent a significant cost savings that we will pass on to the OEMs. So that’s where we are at. And by the way we are taking the same strategy with DriveCore, where we are focused on level 2 plus. And here again, I think our initial views on the viability of the more advance levels of autonomy have been proven to be more correct and focuses on 2.5. And with the goal of developing most of the technology in-house, so that we can offer a very cost competitive solution, made a lot of progress with the vision processing algorithms, developing them in-house. Also, on the hardware and late summer, we expect to be in a position that the technology will be mature enough where we can then take it to other customers beyond GAC, who is our lead customer that we're working with on that front. So, the three main platforms, infotainment, that's ready to go. We are actually using it with the one that just got launched and some other OEMs, lot of progress being made on clusters. And then DriveCore is the one that is going to come third, but still this year.

Okay, great. Thank you.

The next question is from Itay Michaeli of Citi. Your line is open.

Great, thanks. Good morning everyone. Just want to go back, Sachin’s had to the new business discussion. So, was the $300 million you mentioned before, just the delay in Q1 and how should we think about, where you see the opportunities for the remainder of the year. I mean, did you think you still have an opportunity to book over a billion dollars, a quarter of new business and kind of, how we kind of thinking about that?

Right. And it truly is a delay that we expect to be working on either in Q2 or Q3 depending upon how this delay is cascade in the quarters. But fundamentally what we are seeing is more or less a similar situation as last year with most of the opportunities coming from the transition of clusters from analog to digital. And within that we are seeing a lot of interest in what we call now as the mixed digital clusters. So, clusters at the lower end of the market, eight inches of display size with some other LED and other capabilities to really drive the product into the A and B segments of the market. So, a lot of opportunity there. We are seeing a lot of opportunity based on the infotainment platform, that I just mentioned earlier. So, we've talked about this before where we are seeing the market collapsed from the three segments that we used to have an infotainment to effectively to display audio and the high-end infotainment. And at Visteon, we are really not focused on the high-end infotainment, we are focused on the display audio. And the platform that we have built that just got launched puts us in a great position. So, we have few opportunities based off of that. And then the third segment, which is relatively new to us, but we did see that last year as well, our displays, and within displays, we have a very clear focus, we are not focusing on the commodity flat screen 8, 10 inches poke through displays, but more the multi-screen products that I mentioned earlier as well. So, these are multi displays that are behind a glass covalence. Often this tends to be curved. And there's again a great launch that had happened at CES with one of our products with the Nissan Aria concept, that's a SUV, that's an EV product, the information is actually available online and the display is from Visteon. And it's a beautiful curved display, and it's a - the kind of product that we see more opportunities off in the future. With what has happened here, we expect to see less interest in technologies like OLED, more interest in the traditional display technologies. At the same time, more of a focus on value. So, our strategy of, again, vertically integrating as much of the displays as possible in our plants will also serve as well.

That's helpful thoughts. On that point, given your view that OLED could be delayed. Are you starting to see incremental interest in a microZone product you introduced at CES or just still early?

Absolutely we are, and what it has done is, it has really given Visteon the credibility that we necessarily didn't have in this segment of the market. Where Visteon business with displays prior to last year was almost exclusively focused on Ford and we were not really a supplier to the other OEMs. So, getting on the supplier panel, our strategy here to land first and then expand, we need always, when we do that a technology innovation that that becomes the calling card, why we should be considered for that opportunity. And microZone serves that purpose extremely well. Now, we still want to position it as a premium product. It is not a replacement for the current commodity LCD technologies, and we will still continue to see more business with the traditional LCD technologies but fewer on the microZone. But it's a product that we believe will also be interesting to those OEMs that don't want to pay for something like OLED but want a better experience in their cockpits.

That's helpful. Just lastly for Jerome kind of back to a balance sheet and liquidity, I apologize if I missed this. But are you able to share, where cash is expected to end the month of April and then just how to think about cash pre and post working capital to the extent that some of the production resumptions are delayed?

So, we'll not give detail regarding our cash balance for April, nor will we give the amount of cash outflow, we'll have for Q2. But let me help you maybe frame, what we are looking at for Q2. So, we talked about sales decline being pretty dramatic anxious showing close to 50%. Incremental margins in the high-20s. So that's for EBITDA. On the cash flow side, we will be reducing our CapEx spend. We've announced earlier on that we would be looking at a 20% reduction for the full year. So that will apply as well to a quarter two. And then on the working capital side, we had some good performance in Q1. You can assume that DPO, DSOs will remain pretty stable in terms of working capital. And then on the inventory side, we are expecting inventory to be fairly stable. We are obviously making sure that we are ramping up with our customers and being able to supply goods. At the same time, we'll be monitoring these very carefully, But I think assumption of flat inventory between Q1 and Q2 is a reasonable assumption, probably as well as a bit of cash taxes reduction. So that gives you a kind of a frame to be able to think about Q2 EBITDA, but as well as cash flow.

Great. That's very helpful. Thank you.

Your next question is from Emmanuel Rosner with Deutsche Bank. Your line is open.

Hi. Good morning everybody.

Good morning.

Sachin, I was hoping to ask you about the competitive environment for your technology and products. At the beginning of the Q&A, since you were talking about a consistent 35% to 40% win rate on the available opportunity. So, have you seen any changes in this environment, recently even sort of like before COVID. And in particular, any changes in willingness or eagerness of automakers to insource either software or other parts of some of the things that you could supply? And I think because I'm also wondering about your thoughts on the other side of COVID. Is there an opportunity from maybe as automakers are sort of a little bit more mindful of what they want to spend on? Is there an opportunity for you to supply more than what was available?

Sure. So, let address that first from pre-COVID perspective and then we can talk about what might post-COVID environment look like competitively. So, as you know, we are laser focused on the digital cockpit. For now, what that means is digital clusters, displays, infotainment, and as we get forward here, level two plus autonomous. Now, if you think about where we were at with digital clusters in addressing the top OEM customers, if you look at the top 15 OEMs, prior to about two years, three years ago, we had only two out of the top 15 as Visteon customers' digital clusters. Today, there are only two OEMs in that list that are not Visteon customers today. Now, we have a lot of opportunity to grow within many of them. So, in in some ways we can say that we have landed, but there's a lot of opportunity to now expand within those OEMs for digital clusters. Now let's take a look at infotainment. When I came here, we had one customer effectively for infotainment outside of China. And that was Mazda. Today we have five. Now we have launched with only the second and that happened just yesterday, but we have other customers that we are working with. And we are in that land of phase of the land and expand strategy on infotainment. Displays, we are in a slightly better position. We were also earlier just with one OEM customer we have expanded that also quite well. And so, with all of these, as you can see, we are taking market share, we are growing our footprint. And we have a lot of focus on the top 15 of the largest OEMs simply because it gives us a better ability to expand once we land. So that's the…

Okay, that's great color. Just one quick follow up on the financial side, so CapEx reduction, how do you manage this? In the complex of still, a lot of the launches not really being pushed up on too much more than like two or three months? I guess what part of the CapEx you're getting there.

Yeah. Let me start and then I'll have Jerome jump in here as well. So, if you think about the launches and the CapEx associated with them. The CapEx is usually spent anywhere between nine months to a year before the launches. So, a lot of the launches this year, the CapEx was already spent most of it last year. Now, the CapEx that we would spend this year is in the service of the programs that will be launched, say in 2021, or 2022. These are typically things that we need to install in our plants for either final assembly or testing or some special capability that that new product requires. So, depending upon the level of new business wins, we would be looking at that as a way to make sure that we dial the CapEx into the right level. Number two, I mentioned this earlier, we started an initiative to look at how we reduce the cost of building the equipment that's required to do this final assembly or testing and do it more efficiently and cost effectively. Now these were things that in the hustle of the daily business were not necessarily the focus of the company. We have put a lot more emphasis on it and we believe we have a lot of opportunity to take cost out. And again, the platformization and the streamlining of our product portfolio where you don't really need different types of testers if you are building a lot of different digital clusters, the sizes may be different, but the mentally it's the same product. So, as our products converge, as our focus on cost, reduction of those equipment starts to take effect, I believe we have definitely an opportunity to save at least 20%, if not more on the CapEx.

So, just to add a few comments, so Q1 was a higher than prior year, exactly as Sachin said we had, anticipated in 2019, the higher launches that we would have in 2020, there's a lag between what we're spending and the volume. So, going forward, the volumes are obviously going to be lower and that's why we'll be able to reduce, a portion of our CapEx. IF you think about it, 70%, 80% of our CapEx relate to new business and we are able to adjust for that. I think another big driver as well is negotiation, cost reductions that we are entering with suppliers as well as terms negotiation. So, these are kind of the overall actions that we're taking to reduce significantly CapEx in the next three quarters.

Perfect. Thank you.

Thank you. Great, thanks. And this concludes our earnings call for the first quarter of 2020. Thank you everybody for participating in today's call and your ongoing interest in Visteon. If you have any follow-up questions, please contact me directly. Thank you.