Good morning. I'm Ryan Wentling, Vice President of Investor Relations and Treasurer. Welcome to our earnings call for the fourth quarter and full year 2024. 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.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 Financial Officer. We have scheduled the call for one hour, and we'll open the lines for your questions after Sachin's and Jerome's remarks. Please limit your questions to one question and one follow-up. Thank you for joining us. Now I will turn the call over to Sachin.

Thank you, Ryan, and good morning, everyone. Thank you for joining our fourth quarter full year 2024 earnings call. Visteon delivered a strong performance in 2024 with robust sales of $3.87 billion, record adjusted EBITDA of $474 million, and record adjusted free cash flow of $300 million, all of which are outstanding numbers for our company. Our product portfolio is well aligned with key industry trends of digitalization, software-defined vehicle, and electrification. Demand for Visteon products that enable these trends, such as SmartCore, large displays, digital clusters, and DMS, was strong and resulted in our sales outperforming underlying customer vehicle production by four percentage points. In the Americas, Visteon outperformed the market by double digits driven by the ramp-up of digital cluster and electrification products. In Europe, Visteon outperformed the market by mid-single digits with the launch of digital clusters and large displays in mass-market passenger vehicles as well as on heavy commercial vehicles. In Asia, robust demand for large displays and SmartCore drove mid-single-digit market output. While market headwinds faced by our customers in China muted our performance, Visteon delivered 9% growth over the market outside of China. We secured $6.1 billion of new business wins in 2024 with strong demand for our large displays, SmartCore, and digital cluster products. We achieved important milestones in new product introduction with first wins for our high-performance SmartCore and onboard charger and DC to DC converter, which further expands our product portfolio into fast-growing parts of the market. While our customers had lower than average court activity in 2024, I'm pleased that the breadth and strength of our product portfolio enabled us to exceed our new business win target for the full year. Adjusted EBITDA was a record $474 million driven by strong operational execution and our continued focus on cost control.…

AI and large language models

will drive the next cycle of innovation and content growth in the cockpit and require new hardware and software solutions. We introduced a high-performance version of SmartCore called SmartCore HPC that can run AI models in the car and secured our first win with Zeekar as discussed on the previous page. And at CES earlier this year, we introduced an industry-first software solution for AI-based user interface called Cognito AI, that enables carmakers to implement smart assistant features in their cockpits. Our technology platforms are a key competitive advantage for Visteon, and we are continuously enhancing these platforms and integrating more functionality in them. We integrated new software technologies such as surround view and software-defined radio that eliminates the need for third-party solutions, reducing the total system cost to carmakers. We're also driving vertical integration of hardware, bringing tier two content in-house to drive innovation and increase our while removing layers from the supply chain. In 2024, we started manufacturing automotive cameras in-house, as well as designing backlight units for displays and injection molding of various metal and plastic components used in our products. Our cost structure is already very competitive, with most of our manufacturing and engineering footprint located in best-cost regions. However, we continue to look for opportunities to further align our footprint to the evolving market dynamics. In 2024, we increased our resources to support growth in Japan and India, while reducing our footprint in China to reflect the changes to the market in that region. And the software is CoreTwistion. We have established a training and development program to build a pipeline of talent to meet our growing needs for software developers that are specialized in key automotive technologies. This is truly a competitive advantage as it's very challenging to find such expertise in the market. We remain committed to a balanced capital allocation approach. We are laying the foundation for future growth with the organic growth initiatives I mentioned earlier, while layering in M&A to expand our product and technology offerings. We deployed $55 million to M&A in 2024 and have a pipeline of additional Turk and acquisitions. We also returned capital to shareholders with $63 million of share repurchases in the year. Overall, 2024 was an impressive year for Visteon, as we expanded our product and customer base, delivered strong financial results, and set ourselves up for future growth with strong bookings. Turning to page six,

On this page,

I would like to share our sales outlook for 2025 and through 2027. For 2025, our customer vehicle production forecasts are based on S&P Global's January forecast and include company estimates where our production expectations differ from S&P. Global light vehicle production is expected to decline slightly with the mid-single-digit decline in Visteon's customers' vehicle production. Several of our largest customers, including Ford and GM, are expected to adjust production to work down elevated vehicle inventories. Our growth over the market is expected to be mid to high single digits in 2025, with another year of outgrowth in every region outside of China. Our strong performance is driven by new product launches with several customers, including Ford, Renault, Stellantis, and Toyota, as well as commercial vehicle and two-wheeler OEMs. Despite a strong performance in 2024, we expect electric vehicle sales in the US to stay flat in 2025 due to tariff and incentive uncertainty. We're forecasting our BMS sales to be slightly lower in 2025, accounting for the elevated levels of electric vehicle inventory in the market. In China, where we have experienced sales headwinds in 2024 from the loss of market share by global OEMs, we expect our sales drop to moderate in 2025 and represent the low point for our sales in that market before recovering in 2026. Overall, we're guiding to sales of $3.75 billion at the midpoint for 2025. This represents a flat base sales year over year despite the headwinds from lower customer vehicle production recoveries as well as FX. This is a very solid performance as a strong product portfolio and business win momentum offset the near-term market headwinds. Now turning to our outlook for 2026 and 2027. We're assuming that light vehicle production increases in line with S&P global forecasts for both years, with customer mix improving from 2025. Growth over the market is expected to be in mid to high single digits in 2026 and 2027. We have some large SmartCore and display programs that are launching with customers in Asia and Europe that will drive our market outperformance in those regions. In China, in particular, we have several new launches with domestic Chinese OEMs as well as German and Japanese OEMs that are expected to do relatively better and hold their market share in that region. Our BMS sales are expected to grow modestly in line with electric vehicle sales growth at GM and Seltos, and helped by the launch of BMS with the third customer based in Europe. Overall, we're targeting $4.15 billion in sales in 2027, which is a mid-single-digit sales growth CAGR relative to our 2025 sales guidance. This represents an attractive multiyear growth profile as our strategic initiatives continue to gain traction. Now, I will turn the presentation over to Jerome.

Thank you, Sachin, and good morning, everyone.

I want to start by taking a step back and looking at our financial performance over the past five years. For perspective, I would like to compare our current results to what we delivered in 2019, the last year before the COVID crisis. During this time, the industry has faced several challenges, with significant supply chain disruptions and inflation, and yet we have grown revenue, improved margin, and generated impressive free cash flow. Over the last five years, sales increased almost $1 billion compared to 2019, including recoveries. Our leading market position in digital clusters and cockpit domain controllers drove strong growth in the first half of the period, while innovations in displays and electrification generated growth later in the period. We grew despite a substantial sales headwind from the changes in the China market since 2022. We doubled EBITDA over the same five-year period, EBITDA margin reached a record of more than 12% in 2024, an improvement of 440 basis points compared to 2019. Our ability to grow revenue and significantly improve margins at the same time is a testament to our strong product portfolio and operational efficiency. Improvements in margins have been the result of scale from additional sales, our laser-focused cost approach, and our drive for best-cost footprint as well as an engineering platform approach, which allowed us to optimize cost while continuing to invest in the business. Our EBITDA to cash conversion was 38% on average over the five-year period, which is the direct result of our increased profitability, our success in managing working capital, as well as turning Visteon into an efficient business with light capital requirements, all supported by a strong balance sheet. Overall, Visteon has delivered impressive improvements in sales, margins, and cash flow over the last five years. With an innovative technology-based…

Looking now to the medium term,

we're providing 2027 targets for sales, adjusted EBITDA, and adjusted free cash flow. For sales, our target for 2027 is $4.15 billion. This represents a 5% growth CAGR and an increase of $400 million in sales between 2025 and 2027. Our forecast assumes a modest LDP growth for our customers over the period. We're expecting growth of a market of mid to high single digits in both 2026 and 2027, driven by the progress on our strategic initiatives. We expect our growth to be largely driven by launches of next-generation products that align with our strategy of growing our business with wide space customers in the rest of Asia in SDV enabling products with OEMs in Europe, and in adjacent markets including commercial vehicles and two-wheelers. We continue to have significant new product launches, including a few key programs such as a display with Toyota, a cluster with Maruti Suzuki, a large CDC program with a luxury German OEM, or multiple products on two-wheelers with Honda, TVS, BMW, and Royal Enfield, and a high-performance compute copy domain controller with ZKAR in China. As a result, our product portfolio mix will continue to evolve with growth driven by displays, electrification, and cockpit domain controllers, while at the same time expanding our market share with voice space OEMs and in adjacent markets. In addition, we anticipate we will return to growth in China starting in 2026. For adjusted EBITDA, margins are expected to expand to 13.3% in 2027. This represents a 90 basis point increase from 2025. Roughly half of the increase in margin is from leveraging scale as we grow the business, and the other half relates to further improvements in operational performance and manufacturing costs, including vertical integration. Our continued focus on cost controls drives incrementals in the low 20%…

please press star then the number one on your telephone keypad. Again, that is star and the number one. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Dan Levy with Barclays. Your line is now open. Please go ahead.

Hi. Good morning. Thank you for taking the questions.

I wanted to ask a couple of questions on the revenue outlook and mix dynamics. And first, maybe if we could just talk about the growth opportunity that you had ahead with, you know, the Asian OEMs, Toyota, etcetera. What percent of the revenue is it today? I think it's small. How significant is that in driving growth for this year and through 2027.

Great. Great. Thanks, Dan. And let me take that question and Jerome can add more to it. So, no. These Asian OEMs historically have been underrepresented in our revenue makeup. And I'm talking about OEMs primarily in Japan and India, so OEMs outside of China. And then just to put things into historical context, the reason why they were underrepresented was because we were working with many of them in China. China was the focus for them as well with us. In the past few years, also, as we started to see this transition happen in China, with the loss of one per share for global OEMs, about a couple of years ago, we made it our strategic initiative to grow business with these OEMs outside of China. In terms of our current share of revenue, I think they are, like, mid-high single-digit levels. And if we think about even by 2027, they would almost double in terms of the share of our revenue. So pretty robust growth. And 80% between them. I would say somewhere around 25% to 30% of the global vehicle production. So it's a sort of a white space opportunity for us.

Great. Thank you. Second question is also on mix dynamics. And it's maybe two parts of it. You know, you're talking about customer mix as a headwind this year, but improving next year. If you could unpack that. And you're saying China sounds like it's weak this year, but turns around the next couple of years. What's turning things around in China? So customer mix, yeah. Yeah. You know, yeah. Thank you. Yeah. Let me walk you through that because it is something that does need a little bit of explanation. So if you look at customer mix, and I'll start with 2024. Overall, production was down by, let's say, about a point in terms of LBP. Our customer mix was negative. Slightly up by about one, one and a half percent in 2024. And as we look at 2025, we are essentially looking at industry forecasts, S&P Global's forecast, mid-January, as well as the customer data that we get directly from our customers. And I would say that our customer data tends to be more accurate. In the near quarters, first couple of quarters after that, we tend to use more industry forecasts to come up with our own perspective, a balanced perspective of how we feel the LVP will turn out. And the negative mix in 2025 is really driven by a few large customers that are forecasted by S&P Global to have lower production this year. As compared to last year, for example, Ford and GM here in North America, Europe, it is Mercedes primarily that's impacting us. Just dragging our mix down. In Asia, it's Nissan and Mazda. Now most of that is in the second half of the year, so we will have to wait and see how much of that actually transpires. But as…

Thank you. That's very helpful.

Your next question comes from the line of Mark Delaney with Goldman. Please go ahead.

Yes. Good morning. Thanks very much for taking my questions.

I was hoping to start with SmartCore. If we look at the SmartCore infotainment bookings, in total for 2024, I think it ended up at about $1.6 billion compared to $0.7 billion last year. You did mention some momentum that was SmartCore specifically. So could you elaborate on how SmartCore bookings are tracking? I'd be especially interested if you had any success with multi-domain controllers, which I know had been an area of focus for the company in the last few years. As you think about SmartCore going forward, the last Investor Day, you spoke about that getting to a billion dollars in revenue in 2026. And I recognize the industry environment has changed, but maybe you can update us when you see SmartCore revenue reaching that sort of a level.

Yeah. Yeah. Sure. So the thing I would like to first maybe discuss here is that what we're seeing is a couple of trends. Right? So large displays and higher power SmartCore or company domain controllers are really worth driving the products in the mid to upper section of the market. But there's also a lot of interest in standalone digital clusters, IVI, are in more mass market. So both those dynamics are happening at the same time. And we have inherently SmartCore wins tend to be lumpy. These are the more complex systems that our carmakers have in their product portfolio. And so that's where there's a lot more activity that goes into the coating and vetting of the suppliers. Another thing I would like to mention and which I also verified in my prepared remarks is that in 2024, we saw a slightly lower level of customer activity in terms of quoting. Especially in Europe and North America as the OEMs were dealing with the evolving market dynamics with lower than expected demand for EVs and has been happening to their sales in China. So if you look at, you know, 2023, we did pretty well. And that was also mostly with Western OEMs. And in 2024, the majority of our users were from Asia. For the reasons I mentioned came from Asia. And the products that for of, I would say, interest to the OEMs there. Yes. Some SmartCores, but, lastly, displays and standalone clusters and IVI or infotainment. As many of those OEMs were a little late in following some of those trends and are now quickly catching up. Now I expect to see SmartCore activity in Europe and the US return back this year and then next year. So things, you know, ultimately are a little lumpy when you talk about new business wins. But overall, I do expect it to be okay for us.

And, Sachin, that includes with multi-domains as an area where you could get some bookings?

Yeah. I think for us, you know, when we talk about multilevel domain, you know, we do see some body control functions getting integrated into SmartCore. So when we talk about SmartCore HPC, it's a good example. Don't really classify that as a multi-domain controller. For us, it's still more of an integrated cockpit domain controller with some Polycoms that's integrated. We don't yet see ADAS, for example, integrated into a single compute cluster. That will probably take a little bit longer.

Helpful. My second question is just around bookings and you just alluded to it, but the quoting activity in 2024, you said was somewhat subdued. Could you talk about your expectations for the market opportunity for bookings in 2025? And do you have any guidance relative to the $6 billion that you did last year, do you think you could grow it in 2025? Thank you.

Yeah. Absolutely. In fact, you know, the slowdown in 2024 that we mentioned is causing 2025 to be quite robust. Many of these OEMs have to still plan and launch new models. Also, the pipeline seems to be pretty robust, and with this sort of a shift more towards Europe and the US. More. And from a product perspective, it does look very similar to what we have seen in the last couple of years. Displays are pretty strong. As is SmartCore. And in terms of, you know, the overall target for us, it remains the same, $6 billion plus for the year as well.

You.

Okay. Let's take the next question.

Your next question comes from the line of Tom Narayan with RBC. Please go ahead.

Yeah. Thanks. Hi, Sachin and Jerome. Thanks for taking the questions. First one is on the 2025 outlook. So you called out, I think it was Ford, GM, Mercedes, was it I think Nissan and Mazda for why your company-weighted LVP is down mid-single digits. Well, S&P is flattish. I mean, based on what I think those OEMs have said on their respective earnings calls or just in general, it might appear that your guys' forecast could be maybe conservative, just seeing if that's the case. And then appreciate the comments on China. Just as a housekeeping, what are you including in your growth over market expectation in 2025? For China or yeah. For ex-China.

Sure. Sure. And, Tom, you are correct that if you look at some of those OEMs that I mentioned, what they've publicly said, it would imply a more, I would say, or our view being a little more conservative, which is why I wanted to clarify earlier that what we have assumed is based on S&P Global's outlook, especially for the second half of the year. So there might be some, you know, upside if our customers' production plans do materialize. So that's some point. In terms of growth over market, you know, if we again look at 2024, you know, new product launches were really the drivers of our growth over market, especially in the Americas, which was strong double-digit performance. Europe and Asia outside of China were mid-single digit again driven by our product launches. Now China 2024 was a bigger negative. Now as we look at 2025, more or less at a bigger picture, the same dynamic space China improving, moderating in terms of the loss right, and the rest of the world more or less, I would say, looking the same. It does shift a little bit. We have more launches in Europe that's going to drive market outperformance there, stronger than the rest of the regions. But, overall, it should look very similar in terms of growth over market.

Oh, okay. Thank you. And my follow-up, you know, recurring theme that disappeared in, on a supplier basis earning season and even before this what's been called the urge to demerge. A couple of tier-one suppliers announcing their intentions to divest certain businesses to unlock shareholder value. Just curious how you view your portfolio of assets. I know in the prepared comments, you talked about a pipeline of tuck-ins and the M&As you did in 2024. It would appear that you're more likely to add assets instead of cutting. Just curious how you think about portfolio allocation. Thanks.

Yeah. Yeah. Look. That's a great question, Tom. And if you think about the spaces that we are focused on, there's a lot of activity there. There's a lot of content growth happening there, driven by technology. So we really believe that we are in a position to take market share really based on our ability to add new product lines right, and anticipate and position the company to take advantage of the emerging trends. And you've seen us do that now repeatedly. This 2024, we've launched a couple of products, SmartCore HPC, which I think is gonna be a big driver of growth for the company for a fairly long period of time. As more content and especially AI start coming into the cockpit. And electrification, our product line is continuing to expand, very much along the lines that we have said earlier, if you go back a couple of years, we've been talking about adding power electronics to our BMS portfolio and that is starting to come to life. So as our product landscape and technologies landscape grows, it's critical that we have expertise in all of the key technologies that are important. And so we will continue to look for those types of acquisitions. So that's gonna be our strategy for the midterm, and we will see from there how it evolves.

Thank you.

Thanks, Tom. Your next

question comes from the line of Colin Langan with Wells Fargo. Please go ahead.

Oh, great. Thanks for taking my questions. Just wanted to look at the 2027 sales target. It's over a billion lower than what you had talked about at the Investor Day. Can you just remind us what I know, obviously, a lot has changed in the last couple of years, but any way to bucket the major drivers here? I mean, I know EV is one of the factors. Is it really just mostly custom mix, the fact?

Right. Right. I'll start, and then I'll also ask Jerome to maybe expand if I've missed anything. The main drivers are really, I would say, three. That you can consider close to a billion dollars as you said, lower than what we thought it would be. Number one, would be China. Right? So if you think about China, where we were at, and where the market is at now. We were expecting to see steady growth from the 2023 levels. And since then, we've lost almost about I would say five percentage points of revenue in China alone from just where we were at in 2023, let alone the growth. So if you consider what we were expecting, it's actually a bigger impact than a five percentage point that I mentioned. After that, you have electrification. Right? BMS, in particular, you may remember back in those days, the expectation was much higher in terms of ramp-up of electric vehicles and our customers. And that has come down significantly. Between the two of them, that's about 70% to 80% of the impact in terms of the billion dollars that we're talking about. And the rest is just production expectations. Our customers' production over that period of time has come down, and that's really the third bucket. Jerome, do you have anything?

I would just add EV as well. Growth. So beyond BMS, which is for us, essentially GM, EV was supposed to grow much more, and we had some very specific programs that were on EV that obviously are not for electronics content. Exactly. Yes. So that are not going to have the same impacts. So that's probably as well in the second bucket. Another area to mention.

Got it. And any color, where is your China obviously, China's number one on your list there. What is your China local mix in 2024? And where do you see it going by 2025 and 2026? So when are you able to catch up there, or can you given some of the economics of locals, isn't always great.

Sure. Sure. Sure. So if you look at, you know, under revenue, it's about 10% of the company revenue that's out channel exposure now. And of that, the mix is 60/40, so 60% with global OEMs and 40% domestic. As you know, the market share is about, I would say, reversed. Right? So the domestic OEMs have about 65% of the market versus global OEMs, 35%. And that has come down quite quickly over the last couple of years. However, I would like to just point out that if you look at the performance of global OEMs in the market. In January of this year. Although it's just one month's data, they've been able to hang on to their market share in January in terms of video sales. So global OEMs are at about 35%. Just the same rate that they exited last year at. And that's the first time I've seen even though the data is, as I said, just one month data, that there hasn't been a further degradation of market share. And so I think that points to maybe some level of at least a slowdown in the erosion of the share and maybe at some point, it will form a certain base level that we can work with. In the mid to long term, I do expect that German and Japanese OEMs in particular will have a certain share of the market that we can participate in. And then the rest of the business will be the domestic OEMs.

Got it. Alright. Thanks for taking my questions.

Okay.

Your next question comes from the line of James Picariello with BNP Paribas. Your line is now open. Please go ahead.

Hi, everyone. Based on free cash flow, can you confirm what specifically drove the working capital benefit in the quarter, how that influences your 2025 free cash flow outlook? And can you speak to the M&A pipeline, how that looks and will be balanced against share buybacks for this year? And, also, what was the inorganic revenue contribution in the quarter? Apologies if I missed that. Thank you.

Yeah. Thanks a lot, Jim. So we had a very good quarter in terms of cash flow generation. Indeed. And there are a few drivers. And in fact, it's a lot of little things that added up to a fairly large number. So it was, as you just said, mostly from working capital. Generally, I would say collections were very good with customers, but we were surprised in some cases with the timing of some of the payments from some customers. So that's one driver. The second driver is the fact that we had very good recoveries, engineering recoveries in Q4. And again, the timing of these recoveries allowed us to collect the cash in Q4 where normally it would have probably gone into Q1. So that's the second big driver. The third large driver as well, we generated inventory reductions. And that as well has driven some cash and finally, what you have in Q4 generally is a reduction in sales. And that generates some positive as well working capital. So some of that will not reoccur, obviously, in Q1. Mostly, the timing of the customer's engineering recoveries and as well the inventory reduction. So that's why you have such a, let's say, large cash inflow in Q4 of 2024, and we don't see that flowing through going into 2025. Our conversion we think, is still around 40%. From EBITDA to cash flow. So it's very consistent with what we've been generating in the last few quarters. In terms of capital allocation, we remain very balanced. We've done about $43 million of share repurchases in Q4. When I say balance, we continue to invest in the business. We bumped up a little bit. You probably saw in 2025 our CapEx spend to invest in vertical integration, whereas, well, because of all the wins that we are having in the rest of Asia, we need to as well rebalance a little bit our footprint and we're investing in India. And the rest of Asia, to be able to accommodate that. We're investing in vertical integration, so that's one aspect of our capital allocation. We are working on a pretty extensive pipeline of M&A in 2025, and we're making good progress on that side. And then finally, we'll remain opportunistic on the share repurchase side. So again, a very balanced approach as far as capital allocation is concerned. And then maybe back to your final question, the acquisition we did in 2024, which was at the end of 2024, was pretty small. In nature. It was more adding capabilities. So it's not really material to our numbers in definitely not in 2024. And not even in 2025. So we've not been disclosing any substantial information on that side.

Got it. Okay. Super helpful. And my last question just on BMS. You're assuming flat to slightly down. This year to account for IRA tax credit repeal uncertainties. I, of course, think that's prudent, but just curious if that's getting informed by your own bottoms-up roll-up of customer indications, or is it simply just, you know, an overlayed macro point of conservatism on your part? And if possible, could you also confirm what your BMS revenue total was in 2024.

So what we saw in 2024 was pretty robust demand for our BMS product, especially with GM. And as you probably know, the supply chain. Pipeline is a little more extended for BMS than for some of our other products because we supply to the battery plant that then supplies to the vehicle manufacturing plant. So there are the two reasons why we believe that it's good to be prudent. One is we talked about the IRA, correct. Potentially being at risk. Number two, overall demand is not as strong as perhaps was anticipated earlier. And as a result, there is a fair amount of inventory both of vehicles as well as from our perspective, product going into that extended supply chain. So we believe 2025 will be a year where that's gonna get adjusted and balanced out. And then, 2026 onwards, we can expect to grow with the market. So that's really been the main thinking, you know, the driver behind our forecasting for slightly lower BMS revenues for us in 2025. Jerome, we want to talk about how big was the

Our revenues in 2024 were high single digits for BMS. And as Sachin said, it was a great year for us with a lot of ramp-ups and probably quite some inventory building as well. I see that as a growth.

Is that the high single digit? Oh, high single digit percentage of total sales. Got it. Thank you. Alright. Correct. Yeah. So on total sales. Yes. Yes. That's okay.

Your final question comes from the line of Shreyas Patil with Wolfe Research. Please go ahead.

Hey. Thanks so much for taking my question. Jerome, you mentioned that 50% of the EBITDA margin improvement by 2027 is being driven by scale. And I was wondering if you could just expand on that. Is that mainly SG&A leverage or do you have capacity that needs to be filled out?

Yeah. So, absolutely, that's what I mean by scale. Generally, we've seen that this business is very sensitive to scale, and we've done a great job over the years leveraging additional volume while keeping our SG&A and engineering up. Levels that are reasonable, to use that word, not proportionally. Increasing to the level of sale. So that is what I do mean by scale. The rest of the improvement is coming from our operational improvement, and we still have got a lot of areas that we can we think we still improve. We've done, as I said, a pretty good job in the last few years. I'm mentioning vertical integration as one fundamental driver for us to improve margins and bring in as much as what we can control not only for cost-saving purposes, by the way, but as well to stay relevant from the technology standpoint in some areas like displays. We will continue obviously to work on manufacturing productivity, but we do as well continue to work on engineering productivity automation in engineering, AI as well, will be a tool that we'll be using to be able to be more productive from an engineering standpoint. So there are a lot of drivers that we are considering as we look into 2027.

Okay. And then looking at 2024, clusters as a percent of total bookings it's about 17% last year. It's about 40% of the current revenues. So just trying to get a sense of what happened or what you were seeing in clusters last year and how you're thinking about the growth rate for that business going forward.

Yeah. Yeah. So that's a good question, Shreyas. And this goes back to the point that I was making about some of the changes we are seeing in terms of the product makeup as we go forward here. So standalone clusters and infotainment in the mid to high segment of the market are gonna be replaced by larger displays and copy domain controllers. So there will be some level of that sort of cannibalization, if you want to call it that, gonna happen in the industry. And for us, we think that's a good thing because from an ASP viewpoint, both displays and CDC are higher than standalone customers. And IVI or infotainment. At the same time, we're seeing those go more down market in terms of more affordable vehicles. The volumes are gonna go up. ASPs are gonna go down on those clusters and infotainment. And that's how we see the market evolve. What we have done here is to anticipate these trends and position us in a manner where we can take advantage of them. So we have a very strong displays and CDC business that's growing. Clusters are still growing. If you look at the volume, our digital clusters grew close to almost 17%, 18% in 2024 year over year. Right? And ASPs have come down as those their product has gone into more volume-oriented vehicles. So we will continue to see this dynamic, which is, I think, a very natural progression of how content is growing more starting with the upper end of the and then coming down into the mass market.

This concludes Visteon's fourth quarter and full year 2024 results earnings call. You may now disconnect.