Lear Corp (LEA) 2023 Q4 法說會逐字稿

Good morning, and welcome to the Lear Corporation Fourth Quarter and Full Year 2023 Earnings Conference Call. (Operator Instructions). After today's presentation, there will be an opportunity to ask questions. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Ed Lowenfeld, Vice President, Investor Relations. Sir, please go ahead.

早上好，歡迎參加李爾公司 2023 年第四季和全年財報電話會議。 （操作員說明）。今天的演講結束後，將有機會提問。另請注意今天的活動正在錄製中。現在，我想請投資者關係副總裁 Ed Lowenfeld 發言。先生，請繼續。

Thanks, Jamie. Good morning, everyone, and thank you for joining us for Lear's Fourth Quarter and Full Year 2023 Earnings Call.

謝謝，傑米。大家早安，感謝您參加李爾 2023 年第四季和全年財報電話會議。

Presenting today are Ray Scott, Lear President and CEO; 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.

今天出席會議的有李爾總裁兼執行長雷‧斯科特 (Ray Scott)； Jason Cardew，資深副總裁兼財務長。李爾高階管理團隊的其他成員也加入了我們的電話會議。在準備好發言後，我們將開始問答環節。您可以在 ir.lear.com 上找到伴隨這些評論的簡報副本。

Before we begin, 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.

在我們開始之前，我想藉此機會提醒您，在我們進行本次電話會議時，我們將做出前瞻性聲明，以幫助您了解李爾對未來的期望。正如我們在投影片 2 上的安全港聲明中所詳述的那樣，由於我們最新的 10-Q 報告和其他定期報告中討論的許多因素，我們的實際結果可能與這些前瞻性陳述存在重大差異。

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 year and provide a business update. Jason will then review our fourth quarter financial results and our full year 2024 outlook. Finally, Ray will offer some concluding remarks. Following the formal presentation, we would be happy to take your questions.

我還想提醒您，在今天的演示中，我們將參考非公認會計準則財務指標。您將看到我們簡報附錄中的投影片，了解非公認會計準則項目與最直接可比較的公認會計準則衡量指標的調節。今天電話會議的議程位於幻燈片 3 上。首先，Ray 將回顧這一年的亮點並提供業務最新動態。接著 Jason 將回顧我們第四季的財務業績和 2024 年全年展望。最後，Ray 將做一些總結性發言。正式演示結束後，我們很樂意回答您的問題。

Now I'd like to invite Ray to begin.

現在我想請雷開始。

Thanks, Ed. Please turn to Slide 5, which highlights key financial metrics for the fourth quarter and full year 2023. The generated record revenue in 2023 of $23.5 billion, an increase of 12% from 2022. Core operating earnings grew by 29% to $1.1 billion. Adjusted earnings per share was $12.02, an increase of 38%. Operating cash flow improved by 22% to over $1.2 billion, and we exceeded our free cash flow conversion target of 80%.

謝謝，艾德。請參閱投影片5，其中重點介紹了2023 年第四季和全年的關鍵財務指標。2023 年營收創紀錄，達到235 億美元，比2022 年成長12%。核心營業利潤成長29%，達到11億美元。調整後每股收益為 12.02 美元，成長 38%。營運現金流改善了 22%，超過 12 億美元，並且超出了 80% 的自由現金流轉換目標。

Slide 6 illustrates key business and financial highlights from 2023. The acquisition of IGB increased our thermal comfort capabilities and allowed us to accelerate development of our modular seating solutions. Customer interest continues to grow. We have 15 projects in process with 11 customers to replace individual components with modular solutions. 12 of our customers have agreed to allow Lear to source the thermal comfort components for 18 different complete seat programs. This control allows us to grow the sales of our thermal comfort products and continues to differentiate our complete seat systems from competitors supporting further market share gains.

幻燈片 6 展示了 2023 年的主要業務和財務亮點。收購 IGB 提高了我們的熱舒適能力，並使我們能夠加快模組化座椅解決方案的開發。客戶興趣持續成長。我們正在與 11 家客戶開展 15 個項目，以模組化解決方案取代單一組件。我們的 12 位客戶已同意李爾為 18 種不同的完整座椅方案採購熱舒適組件。這種控制使我們能夠增加熱舒適產品的銷量，並繼續使我們的完整座椅系統與競爭對手區分開來，從而進一步擴大市場份額。

We successfully launched production of the complete seats for the Wagoneer and the Grand Wagoneer, an unprecedented conquest award that we took over mid program. In E-Systems, we won over $1 billion of new business awards for the third consecutive year and are making progress on diversifying our customer base. We won significant awards with General Motors and Stellantis. We won our first wiring program with BMW, and we received additional awards from a large global EV OEM as well as Renault and Geely.

我們成功開始生產 Wagoneer 和 Grand Wagoneer 的完整座椅，這是我們在計劃中期獲得的前所未有的征服獎。在 E-Systems 領域，我們連續第三年贏得了超過 10 億美元的新業務獎項，並且在客戶群多元化方面取得了進展。我們與通用汽車和 Stellantis 一起贏得了重要獎項。我們贏得了寶馬的第一個佈線項目，並獲得了一家大型全球電動車原始設備製造商以及雷諾和吉利的額外獎項。

Total company sales were a record, while our core operating earnings improved year-over-year for the fourth consecutive quarter driven by continued improvement in E-Systems margins. Our strong performance in cash conversion allowed us to accelerate the pace of share repurchases through the second half of the year, we repurchased over $175 million worth of stock in the fourth quarter for a total of $313 million in 2023.

公司總銷售額創歷史新高，而在電子系統利潤率持續改善的推動下，我們的核心營業利潤連續第四個季度同比增長。我們在現金轉換方面的強勁表現使我們能夠在下半年加快股票回購的步伐，我們在第四季度回購了價值超過 1.75 億美元的股票，到 2023 年總共回購了 3.13 億美元。

Industry publications continue to recognize Lear for our excellence in quality and culture. Including our most recent award last week when FORTUNE Magazine named Lear as one of the most admired companies for the eighth consecutive year.

行業出版物繼續認可李爾在品質和文化方面的卓越表現。包括上週我們最近獲得的獎項，《財星》雜誌連續第八年將李爾評為最受尊敬的公司之一。

Slide 7 highlights some of our upcoming key launches in Seating. We have launches in all of our key regions with a wide range of customers. In -- the 2024 launches include a combination of next-generation vehicles replacing outgoing models where we are the current supplier as well as several brand-new vehicles. In addition to assembling the complete seat, we provide a variety of vertically integrated components such as foam, trim and thermal comfort products.

幻燈片 7 重點介紹了我們即將在座椅領域推出的一些重要產品。我們在所有關鍵地區都推出了產品，擁有廣泛的客戶。 2024 年推出的產品包括取代我們目前供應商的淘汰車型的下一代車輛以及幾款全新車輛。除了組裝整個座椅外，我們還提供各種垂直整合組件，例如泡棉、裝飾和熱舒適產品。

The Hyundai Santa Fe is the first vehicle with a production application for our FlexAir, fully recyclable foam alternative. FlexAir will be utilized in the Santa Fe's third row cap rest. We have a long-standing relationship with Hyundai and are their largest independent seat supplier with about 40% of their external business. We have several launches for BYD this year, including the Sea Lion as we continue to expand with a fast-growing Chinese automaker.

現代 Santa Fe 是第一款採用我們的完全可回收泡棉替代品 FlexAir 進行生產的車輛。 FlexAir 將用於 Santa Fe 的第三排帽架。我們與現代汽車有著長期的合作關係，是他們最大的獨立座椅供應商，約佔其外部業務的 40%。今年，隨著我們繼續與快速發展的中國汽車製造商合作，比亞迪推出了幾款產品，其中包括海獅。

Turning to Slide 8. I will touch on key product launches in E-Systems. Several programs are launching with Lear's high-voltage and low-voltage wearing and connection systems, as well as key electronic components across all of our key regions. We continue to grow with Volvo. We supply wiring and electronics on several nameplates across their CMA and their SPA2 platforms. Electronics sets that the high-power junction box are leveraged across both hybrid and fully electric vehicles, providing a balanced exposure across these growing powertrains. Later this year, our BDU will launch on the Ram 1500 rev, solidifying our position as a leader in high-performance BDUs. 2023 was our third straight year with over $1 billion of business awards in E-Systems. Approximately 80% of those awards are programs that are new to Lear, which will further grow and diversify our business over the coming years.

轉向幻燈片 8。我將討論電子系統中的關鍵產品發布。多個項目正在利用李爾的高壓和低壓磨損和連接系統以及我們所有關鍵區域的關鍵電子元件啟動。我們繼續與沃爾沃一起成長。我們在其 CMA 和 SPA2 平台上的多個銘牌上提供接線和電子產品。電子設備表明，高功率接線盒可用於混合動力和全電動汽車，從而在這些不斷增長的動力系統中提供平衡的暴露。今年晚些時候，我們的 BDU 將推出 Ram 1500 rev，以鞏固我們作為高性能 BDU 領導者的地位。 2023 年是我們連續第三年在電子系統領域獲得超過 10 億美元的商業獎項。這些獎項中約 80% 是李爾的新項目，這些項目將在未來幾年進一步發展和多元化我們的業務。

Turning to Slide 9. I will illustrate key Lear developed innovations we are bringing to market this year. Late last year, we began delivering production parts for the Intercell Connect Board to support GM's launch of the Ultium platform. Volumes for the ICB will grow with the launch and ramp of additional Ultium-based vehicles. We are leveraging our engineering expertise, along with our molding and stamping capabilities to pursue opportunities to supply ICBs to additional customers.

轉向幻燈片 9。我將說明李爾開發的關鍵創新，我們今年將推向市場。去年年底，我們開始為 Intercell Connect Board 提供生產零件，以支援通用汽車推出 Ultium 平台。隨著更多基於 Ultium 的車輛的推出和升級，ICB 的銷售將會成長。我們正在利用我們的工程專業知識以及我們的成型和沖壓能力來尋求向更多客戶提供 ICB 的機會。

We anticipate these programs will be awarded later this year. Proceeding, we are launching 2 new sustainable products in 2024, FlexAir, and ReNewKnit. The first commercial application of our FlexAir material will be for the CAF rest in the all-new Hyundai Santa Fe. The 29 development projects we have with 13 OEMs for application of FlexAir throughout the vehicle seating system is evidence of the tremendous customer demand for this very innovative new product.

我們預計這些項目將在今年稍後授予。接下來，我們將在 2024 年推出 2 種新的永續產品：FlexAir 和 ReNewKnit。我們的 FlexAir 材料的首次商業應用將用於全新現代 Santa Fe 的 CAF 支架。我們與 13 家原始設備製造商 (OEM) 合作進行了 29 個開發項目，將 FlexAir 應用到整個車輛座椅系統，這證明了客戶對這種非常創新的新產品的巨大需求。

FlexAir is 100% recyclable alternative to molded urethane cushion. It provides up to 20% reduction in weight and up to 50% reduction in carbon dioxide emissions. Its open-air structure has better cooling and ventilation characteristics than urethane, further improving the performance of our thermal comfort modules. FlexAir is an attractive, sustainable alternative for the roughly $4.5 billion foam market, which we believe will support continued growth of our component business. Lear's exclusive license for automotive application, along with 190 patents we have filed creates a competitive moat around this very innovative technology.

FlexAir 是模壓聚氨酯坐墊的 100% 可回收替代品。它可減輕高達 20% 的重量，並減少高達 50% 的二氧化碳排放。其露天結構比聚氨酯具有更好的冷卻和通風特性，進一步提高了我們的熱舒適模組的性能。對於價值約 45 億美元的泡棉市場來說，FlexAir 是一種有吸引力的永續替代品，我們相信這將支持我們組件業務的持續成長。李爾的汽車應用獨家授權以及我們已申請的 190 項專利為這項非常創新的技術創造了一條競爭護城河。

We're also starting production for ReNewKnit, which is launching with 3 different OEMs this year. Our (inaudible) alternative is the first-to-market automotive textile that is fully recyclable at the end of its life. We are seeing tremendous interest from our customers for sustainable alternative fabrics. ReNewKnit is also a finalist for the Automotive News PACE Award, once again demonstrating our ability to develop and bring innovative products to market and add value for our customers. These innovative products, combined with Lear's competitive positioning is a leader in seating will allow us to achieve our revenue growth targets while continuing to increase operating margins and financial returns.

我們也開始生產 ReNewKnit，今年將與 3 個不同的 OEM 合作推出。我們的（聽不清楚）替代方案是首款上市的汽車紡織品，在其使用壽命結束時可完全回收。我們看到客戶對永續替代面料表現出極大的興趣。 ReNewKnit 也入圍了《汽車新聞》PACE 獎的決賽，再次證明了我們開發創新產品並將其推向市場以及為客戶增加價值的能力。這些創新產品，加上李爾作為座椅領域領導者的競爭定位，將使我們能夠實現收入成長目標，同時繼續提高營業利潤和財務回報。

Now please turn to Slide 10, which shows our 2024 to 2026 sales backlog of approximately $2.8 billion. As a reminder, our core sales backlog includes only awarded programs, net of any lost business and programs rolling off. It excludes pursuit business, net new business in our nonconsolidated joint ventures and the roll-off of the discontinued product lines in E-Systems. Due to the slower pace of the industry transition to electrification, we now anticipate lower volumes on several of our key customers, new programs as compared to what we assumed last year.

現在請翻到投影片 10，其中顯示了我們 2024 年至 2026 年的積壓銷售約為 28 億美元。提醒一下，我們的核心銷售積壓僅包括獲獎項目，扣除任何損失的業務和滾動的項目。它不包括追求業務、非合併合資企業中的淨新業務以及 E-Systems 中已停產產品線的停產。由於產業向電氣化轉型的步伐較慢，我們現在預計幾個主要客戶和新項目的銷售量將低於我們去年的預期。

By continuing to win new business, we have maintained a 3-year backlog that is a similar size to that of -- to that last year despite the significant changes in volume assumptions. The $2.8 billion backlog is roughly in line with last year's backlog and is well balanced across the 3 years. 2025 is impacted by the assumed roll-off of several ICE vehicles that may or may not come to fruition, depending on the pace of the EV transition. At $800 million, the third year of our backlog is higher than a typical third year. We expect that to increase further as customers continue to source new programs launching in 2026.

透過繼續贏得新業務，儘管數量假設發生了重大變化，但我們仍保持了 3 年積壓訂​​單，其規模與去年相似。 28 億美元的積壓訂單與去年的積壓訂單大致持平，並且在 3 年內保持良好平衡。 2025 年將受到多種 ICE 車輛投放的影響，這些車輛可能會也可能不會實現，這取決於電動車轉型的速度。我們第三年的積壓金額為 8 億美元，比一般的第三年還要高。我們預計，隨著客戶繼續尋找 2026 年推出的新計劃，這一數字將進一步增加。

In addition to the consolidated backlog, the 2024 to 2026 sales backlog at our nonconsolidated joint ventures continues to grow. Our 3-year backlog at our nonconsolidated joint ventures increased approximately 70% from last year to about $650 million. The growth is largely driven by the continued business wins with BYD, which represents more than 50% of our nonconsolidated backlog. We continue to win new business with a diverse set of customers. In the appendix of the presentation is a breakdown of our total sales by customer for 2023 and our expected distribution in 2027. It illustrates the continued diversification and growth we have with key customers such as BYD, a global EV OEM and Stellantis.

除了合併積壓訂單外，我們非合併合資企業 2024 年至 2026 年的銷售積壓訂單也持續成長。我們非合併合資企業的 3 年積壓訂​​單比去年增加了約 70%，達到約 6.5 億美元。這一成長主要是由比亞迪持續贏得的業務推動的，比亞迪占我們非合併積壓訂單的 50% 以上。我們繼續與多元化的客戶贏得新業務。簡報的附錄中詳細列出了我們2023 年按客戶劃分的總銷售額以及2027 年的預期分佈。它說明了我們與全球電動車原始設備製造商比亞迪和Stellantis 等主要客戶的持續多元化和成長。

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

現在我想把電話轉給傑森進行財務審查。

Thanks, Ray. Slide 12 shows vehicle production and key exchange rates for the fourth quarter. Global production increased 9% compared to the same period last year and was up 7% on a Lear sales weighted basis. Production volumes increased by 5% in North America, 7% in Europe and 18% in China. From a currency standpoint, U.S. dollar weakened against Euro but strengthened against the RMB compared to 2022.

謝謝，雷。幻燈片 12 顯示了第四季度的汽車產量和主要匯率。與去年同期相比，全球產量成長 9%，以李爾銷售額加權計算成長 7%。北美產量增加了 5%，歐洲產量增加了 7%，中國產量增加了 18%。從貨幣角度來看，與2022年相比，美元兌歐元走弱，但兌人民幣走強。

Slide 13 highlights Lear's growth compared to the market for the full year as well as for the fourth quarter and summarizes our growth relative to the market over the past 4 years. For the full year, total company growth over market was 1 percentage point with Seating flat and E-Systems growing 4 points above market. This was largely in line with expectations as we anticipated the strong mix experience over the last several years to normalize as well as the negative impact of the UAW strike.

投影片 13 重點介紹了李爾全年和第四季相對於市場的成長情況，並總結了過去 4 年我們相對於市場的成長情況。全年公司總成長率比市場高出 1 個百分點，其中 Seating Flat 和 E-Systems 的成長率比市場高出 4 個百分點。這在很大程度上符合預期，因為我們預計過去幾年的強勁混合經驗將恢復正常，以及 UAW 罷工的負面影響。

Looking at our full year growth by region in 2023. Europe growth over market was 6 points with both business segments benefiting from higher volumes on the Land Rover, Range Rover and Range Rover Sport. New conquest programs such as the BMW 5 series and Seating as well as new business with the global EV OEM, BMW, Renault and Mercedes and E-Systems contributed to the strong growth in the region.

看看我們 2023 年按地區劃分的全年增長情況。歐洲相對於市場的增長為 6 個百分點，這兩個業務部門都受益於路虎、路虎攬勝和路虎攬勝運動版銷量的增加。 BMW 5 系列和座椅等新征服計劃以及與全球電動車 OEM、寶馬、雷諾和梅賽德斯以及 E-Systems 的新業務為該地區的強勁增長做出了貢獻。

North America revenue growth underperformed the market by 4 percentage points, driven by unfavorable platform mix and the impact from the UAW strike. In China, revenue growth underperformed the market by 3 percentage points, driven by unfavorable platform mix. The mix shift to domestic Chinese automakers accelerated in 2023. We continue to win new business with domestic automakers, such as BYD, Geely, Changan, Great Wall and others, which will further improve our customer mix in China going forward.

受不利的平台組合和 UAW 罷工的影響，北美收入成長落後於市場 4 個百分點。在中國，由於不利的平台組合，營收成長落後於市場 3 個百分點。 2023年，向國內汽車製造商的結構轉變加速。我們繼續贏得比亞迪、吉利、長安、長城等國內汽車製造商的新業務，這將進一步改善我們在中國的客戶結構。

For the fourth quarter, total company growth lagged the market by 2 percentage points. However, excluding the impact of the UAW strike, total company sales growth would have been in line with the overall market. Looking at our growth over market over the last several years, our average annual growth in each segment has been in line with our long-term targets with Seating at 4 percentage points and E-Systems at 6 percentage points.

第四季度，公司整體成長落後於市場 2 個百分點。然而，排除全美汽車工人聯合會罷工的影響，公司總銷售成長將與整體市場保持一致。縱觀過去幾年我們的市場成長情況，我們在每個細分市場的平均年增長率都符合我們的長期目標，其中座椅增長了 4 個百分點，電子系統增長了 6 個百分點。

Turning to Slide 14, I'll highlight our financial results for the fourth quarter of 2023. Sales increased 9% year-over-year to $5.8 billion, excluding the impact of foreign exchange, commodities and acquisitions, sales were up 5% reflected in the addition of new business in both segments. Core operating earnings were $288 million compared to $265 million last year. The increase in earnings resulted primarily from the addition of new business.

轉向投影片 14，我將重點介紹我們 2023 年第四季的財務業績。銷售額年增 9%，達到 58 億美元，排除外匯、大宗商品和收購的影響，銷售額成長 5%，反映在這兩個部門都增加了新業務。核心營業利潤為 2.88 億美元，而去年為 2.65 億美元。獲利的成長主要是由於新業務的增加。

Adjusted earnings per share improved to $3.03 as compared to $2.81 a year ago, primarily reflecting higher earnings and the benefit of our share repurchase program. Operating cash flow generated in the quarter was $570 million compared to $537 million in 2022. The increase in operating cash flow was due to higher earnings and an improvement in working capital, partially offset by higher cash taxes.

調整後每股收益從一年前的 2.81 美元增至 3.03 美元，主要反映了收益的增加和我們股票回購計劃的好處。本季產生的營運現金流為 5.7 億美元，而 2022 年為 5.37 億美元。營運現金流的增加是由於收益增加和營運資本改善所致，但部分被現金稅增加所抵銷。

Slide 15 explains the variance in sales and adjusted operating margins in the Seating segment. Sales for the fourth quarter were $4.3 billion, an increase of $306 million or 8% from 2022, driven primarily by our strong backlog. Excluding the impact of commodities, foreign exchange and acquisitions, sales were up 4%. The estimated impact of the UAW strike in the fourth quarter in Seating was $129 million or approximately 3%. The backlog programs include the BMW 5 Series and i5 and the (inaudible) in Europe, the Wagoneer and Mercedes EQE SUV in North America, as well as the Geely Zeekr 009 in China.

投影片 15 解釋了座椅細分市場的銷售額差異和調整後的營業利潤率。第四季銷售額為 43 億美元，比 2022 年增加 3.06 億美元，或 8%，這主要是由於我們強勁的積壓訂單所致。剔除大宗商品、外匯和收購的影響，銷售額成長了 4%。第四季 UAW 罷工對 Seating 的影響預計為 1.29 億美元，約 3%。積壓計畫包括歐洲的BMW 5 系列和 i5 以及（聽不清楚）、北美的 Wagoneer 和梅賽德斯 EQE SUV，以及中國的吉利 Zeekr 009。

Core operating earnings improved to $294 million or up $19 million or 7% from 2022 with adjusted operating margin of 6.8%. Operating margins were flat compared to last year, as the benefit of our margin-accretive backlog was offset by the impact of acquisitions and foreign exchange.

核心營業利潤增至 2.94 億美元，較 2022 年增加 1,900 萬美元，增幅 7%，調整後營業利益率為 6.8%。與去年相比，營業利潤率持平，因為我們增加利潤的積壓訂單的好處被收購和外匯的影響所抵消。

Slide 16 explains the variance in sales and adjusted operating margins in the E-Systems segment. Sales for the fourth quarter were $1.5 billion, an increase of $164 million or 12% from 2022. Excluding the impact of foreign exchange and commodities, sales were up 11%, driven primarily by our strong backlog. The estimated impact of the UAW strike in the fourth quarter and E-Systems was $44 million or approximately 3%. Key backlog programs include the Chevrolet Seeker and Buick Envista SUVs in Asia, an electric vehicle with a global EV OEM in Europe and North America, Renault and Mitsubishi plug-in hybrid electric vehicles in Europe as well as the Chevrolet Blazer EV and Ford Super Duty truck in North America.

投影片 16 解釋了電子系統部門的銷售額差異和調整後的營業利潤率。第四季銷售額為 15 億美元，較 2022 年增加 1.64 億美元，或 12%。排除外匯和大宗商品的影響，銷售額增長 11%，這主要是由於我們強勁的積壓訂單所致。第四季 UAW 罷工和 E-Systems 的預期影響為 4,400 萬美元，約 3%。主要積壓項目包括亞洲的雪佛蘭 Seeker 和別克 Envista SUV、歐洲和北美的全球電動車 OEM 的電動車、歐洲的雷諾和三菱插電式混合動力電動車以及雪佛蘭 Blazer EV 和福特 Super Duty北美的卡車。

Core operating earnings improved to $84 million or 5.6% of sales compared to $64 million and 4.8% of sales in 2022. The improvement in margins reflected our margin-accretive backlog and strong net operating performance, including resolution of key commercial negotiations with customers, facilitating cost recovery and the benefit of restructuring savings.

核心營業利潤增至8,400 萬美元，佔銷售額的5.6%，而2022 年為6,400 萬美元，佔銷售額的4.8%。利潤率的改善反映了我們增加利潤的積壓訂單和強勁的淨經營業績，包括解決與客戶的關鍵商業談判，促進成本回收和重組節省的好處。

Moving to Slide 17. We highlight our history of deploying capital to drive shareholder value. Over the last few years, we made strategic investments to expand our vertical integration capabilities to support growth and accelerate operational excellence. We will continue to focus on organic and modest inorganic investments that drive improvements in automation and plant efficiency.

轉向投影片 17。我們重點介紹我們利用資本來推動股東價值的歷史。在過去幾年中，我們進行了策略性投資，以擴大我們的垂直整​​合能力，以支持成長並加速卓越營運。我們將繼續專注於有機和適度的無機投資，以推動自動化和工廠效率的提高。

In forth quarter of 2023 S&P upgrade Lear to a BBB rating with a stable outlook. We also extended the maturity of our $2 billion credit agreement by 1 year to 2027. These actions further solidify our already strong balance sheet. Our renewed focus on generating cash flow is driving immediate results.

2023 年第四季度，標準普爾將李爾公司評等上調至 BBB，展望穩定。我們也將 20 億美元信貸協議的期限延長 1 年至 2027 年。這些行動進一步鞏固了我們本已強勁的資產負債表。我們對產生現金流的重新關注正在推動立竿見影的成果。

In 2023, we significantly exceeded our target of 80% free cash flow conversion, which enabled us to accelerate our share repurchases in the second half of the year. We remain committed to returning excess cash to our shareholders. During the year, we repurchased $313 million worth of stock, reducing our shares outstanding by 4%. Including dividends, we returned approximately $0.5 billion to shareholders in 2023. $175 million of shares repurchased in the fourth quarter more than the first 3 quarters combined. This share count reduction will help accelerate EPS growth in 2024. Our current share repurchase authorization had approximately $900 million remaining, which allows us to repurchase shares through the end of this year.

2023年，我們大大超越了80%自由現金流轉換的目標，這使我們能夠在下半年加速股票回購。我們仍然致力於將多餘的現金回饋給股東。年內，我們回購了價值 3.13 億美元的股票，使流通股減少了 4%。包括股息在內，我們在 2023 年向股東返還了約 5 億美元。第四季回購的股票金額為 1.75 億美元，超過前三個季度的總和。此次股份數量減少將有助於加速 2024 年每股盈餘的成長。我們目前的股票回購授權剩餘約 9 億美元，這使我們能夠在今年年底前回購股票。

Please turn to Slide 18. Last year, we introduced the Lear Forward Plan. The plan is focused on driving efficiencies in our plants and across our segments. We executed several programs through the course of the year that improve efficiency and increase the long-term flexibility in our manufacturing facilities. To optimize our low-cost footprint, we continue to expand our North African operations. We recently opened a facility to expand our connection systems capabilities to support our European operations and started initial production of thermal comfort products and a second facility.

請參閱幻燈片 18。去年，我們推出了李爾前進計劃。該計劃的重點是提高我們工廠和各部門的效率。我們在這一年中執行了多項計劃，以提高生產設施的效率和長期靈活性。為了優化我們的低成本足跡，我們繼續擴大我們的北非業務。我們最近開設了一家工廠，以擴展我們的連接系統能力，以支持我們的歐洲業務，並開始初步生產熱舒適產品和第二家工廠。

Building on the progress we made in 2023, this year, we will continue to focus on increasing the level of automation in our plants to drive further efficiencies to help offset global wage inflation. The acquisitions of Thagora and InTouch have resulted in increased efficiency, reduced waste and improved quality. We have a pipeline of organic and inorganic initiatives that our team is focused on executing in 2024. The Lear Forward Plan generated cost savings of more than $50 million in 2023. We estimate the opportunities we are pursuing in 2024 can generate an incremental $50 million in annual savings with larger savings anticipated in 2025 and beyond.

在 2023 年取得進展的基礎上，今年我們將繼續專注於提高工廠的自動化水平，以進一步提高效率，並幫助抵消全球工資上漲。收購 Thagora 和 InTouch 提高了效率、減少了浪費並提高了品質。我們的團隊致力於在2024 年執行一系列有機和無機舉措。李爾遠期計劃在2023 年節省了超過5000 萬美元的成本。我們估計，我們在2024 年尋求的機會可以在2024 年增加5000 萬美元的成本。年度節省，預計 2025 年及以後節省更多。

These initiatives combined with commercial recoveries are critical to helping offset the impact of global wage inflation. Actions taken through the Lear Forward Plan also help maximize cash flow generation. By realigning our capacity, we can adjust to changes in production schedules and reduced capital intensity of our business. This was evident in our 2023 results as our capital expenditures were 2.7% of sales, well below our average over the last 5 years of roughly 3% of sales. The projects we implemented in 2023 helped us achieve free cash flow conversion of 90%, well in excess of our 80% target.

這些舉措與商業復甦相結合對於幫助抵消全球薪資通膨的影響至關重要。透過李爾遠期計畫採取的行動也有助於最大限度地產生現金流。透過重新調整我們的產能，我們可以適應生產計劃的變化並降低業務的資本密集度。這在我們 2023 年的業績中顯而易見，因為我們的資本支出佔銷售額的 2.7%，遠低於過去 5 年約佔銷售額 3% 的平均水準。我們在 2023 年實施的專案幫助我們實現了 90% 的自由現金流轉換，遠遠超過了 80% 的目標。

Slide 20 provides detail on our outlook for 2024. Now shifting to our 2024 outlook. Slide 19 provides global vehicle production volumes and currency assumptions that form the basis of our full year outlook. We based our production assumptions on several sources including internal estimates, customer production schedules and S&P forecast. At the midpoint of our guidance range, we assume that global industry production will be 1% lower than in 2023 or flat on a Lear's sales weighted basis. Our global production assumptions are generally aligned with the latest S&P forecast.

幻燈片 20 詳細介紹了我們對 2024 年的展望。現在轉向我們的 2024 年展望。第 19 張投影片提供了全球汽車產量和貨幣假設，構成我們全年展望的基礎。我們的生產假設是基於多個來源，包括內部估計、客戶生產計劃和標準普爾預測。在我們指導範圍的中點，我們假設全球工業產量將比 2023 年下降 1%，或以李爾銷售額加權計算持平。我們的全球產量假設總體上與標準普爾的最新預測一致。

From a currency perspective, our 2024 outlook assumes an average euro exchange rate of $1.09 per euro and an average Chinese RMB exchange rate of RMB 7.15 to the dollar.

從貨幣角度來看，我們對2024年的展望假設歐元平均匯率為1歐元兌1.09美元，人民幣兌美元平均匯率為7.15人民幣。

Now turning to Slide 20. Slide 20 provides detail on our outlook for 2024. Despite our expectations for flat industry volumes, we're expecting our fourth consecutive year of higher sales, operating earnings and earnings per share. Our revenue is expected to be in the range of $24 million to $24.6 billion. At the midpoint, this would be an increase of $833 million or 4% over 2023. This translates to growth of a market of 4% through the total company with E-Systems growing 5% and Seating growing 3% over market, respectively.

現在轉向幻燈片 20。幻燈片 20 提供了我們對 2024 年展望的詳細資訊。儘管我們對扁平材行業銷售有預期，但我們預計銷售額、營業利潤和每股收益將連續第四年增長。我們的收入預計在 2,400 萬美元至 246 億美元之間。中位數時，這將比 2023 年增加 8.33 億美元，即 4%。這意味著整個公司的市場成長 4%，其中電子系統成長 5%，座椅成長 3%。

Core operating earnings are expected to be in the range of $1.155 billion to $1.305 billion. At the midpoint, this would imply an increase of 10% over 2023. Adjusted net income is expected to be in the range of $730 million to $840 million. Restructuring costs are expected to be approximately $125 million.

核心營業利潤預計在11.55億美元至13.05億美元之間。中位數意味著比 2023 年增長 10%。調整後淨利潤預計在 7.3 億美元至 8.4 億美元之間。重組成本預計約 1.25 億美元。

Our outlook for operating cash flow for the year is expected to be in the range of $1.275 billion to $1.425 billion and our free cash flow guidance at the midpoint is expected to increase to $675 million. At the midpoint of our outlook, free cash flow conversion would be approximately 86%, a second consecutive year in excess of our 80% target.

我們對今年營運現金流的展望預計在 12.75 億美元至 14.25 億美元之間，我們的自由現金流指引中位數預計將增加至 6.75 億美元。在我們的展望中點，自由現金流轉換率約為 86%，連續第二年超過我們 80% 的目標。

Lear's strong focus on generating cash allows us to maintain a strong balance sheet while making organic and inorganic investments to strengthen our business as well as to fund share repurchases to significantly reduce outstanding shares and drive growth in earnings per share.

李爾高度重視產生現金，使我們能夠保持強勁的資產負債表，同時進行有機和無機投資以加強我們的業務，並為股票回購提供資金，以大幅減少流通股並推動每股收益的成長。

Slide 21 walks our 2023 actual results to the midpoint of our 2024 outlook. Year-over-year, revenue is expected to grow by more than $800 million and adjusted margins are expected to improve by 30 basis points due primarily to our margin-accretive backlog and strong net operating performance. Positive net operating performance reflects the benefit from our Lear Forward Plan and other performance improvements, partially offset by elevated wage inflation and the negative impact of transactional foreign exchange. Wage inflation is expected to be approximately $90 million greater than what we experienced in 2023, and transactional FX is expected to be a headwind of approximately $70 million primarily as a result of the strengthening of the Mexican peso.

第 21 張幻燈片將我們 2023 年的實際結果帶到了 2024 年展望的中點。預計營收年增超過 8 億美元，調整後利潤率預計將提高 30 個基點，這主要歸功於我們增加利潤的積壓訂單和強勁的淨營運表現。積極的淨經營績效反映了我們的李爾遠期計畫和其他績效改進帶來的好處，部分被薪資上漲和外匯交易的負面影響所抵銷。薪資通膨預計將比 2023 年的水平高出約 9,000 萬美元，交易性外匯預計將受到約 7,000 萬美元的阻力，這主要是由於墨西哥比索走強。

The E-Systems segment is expected to continue its recent performance improvement trends with operating margins expected to increase by approximately 100 basis points in 2024. Seating operating margins are expected to increase modestly, reflecting the continuing benefit of our margin-accretive backlog, as well as the execution of our thermal comfort strategy, partially offset by the impact of lower volumes on existing platforms. We've included detailed walks to the midpoint of our guidance for seating and E-Systems in the appendix.

電子系統部門預計將繼續其近期的業績改善趨勢，營業利潤率預計將在 2024 年增加約 100 個基點。座位營業利潤率預計將小幅增長，反映出我們利潤增長的積壓訂單的持續效益。作為我們熱舒適策略的執行，部分被現有平台銷售下降的影響所抵消。我們在附錄中詳細介紹了座椅和電子系統指南的中點。

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

現在我將把它轉回給雷，讓他聽聽我的一些結束語。

Thanks, Jason. Please turn to Slide 23. 2023 was a key year of strategic execution. In Seating, we closed the IGB acquisition, providing additional capabilities to our thermal comfort portfolio, which further strengthens our industry-leading competitive position. We are in validation with 11 customers for our Thermal Comfort modular solutions. Bringing these solutions to market will accelerate the adoption of thermal comfort features more broadly to a higher-volume vehicles and into second and third row seating.

謝謝，傑森。請參閱投影片 23。2023 年是策略執行的關鍵一年。在座椅領域，我們完成了對 IGB 的收購，為我們的熱舒適產品組合提供了額外的功能，這進一步增強了我們領先業界的競爭地位。我們正在與 11 家客戶驗證我們的熱舒適模組化解決方案。將這些解決方案推向市場將加速熱舒適功能在大容量車輛以及第二排和第三排座椅中的更廣泛採用。

In E-Systems, our execution and focus on efficiencies drove margin improvement throughout the year. We continue to focus on our core products aligned with industry trends to further improve our margins. We expect both business segments to improve growth over market performance in 2024, and we are confident in our long-term growth of our market targets in both Seating and E-Systems. We implemented Lear Forward initiatives, which yielded savings in excess of our initial targets. Our focus this year is on accelerating automation to address wage inflation and improve efficiencies in our plants.

在電子系統方面，我們的執行力和對效率的關注推動了全年利潤率的提高。我們繼續專注於符合行業趨勢的核心產品，以進一步提高我們的利潤率。我們預計這兩個業務領域的成長將在 2024 年超過市場表現，並且我們對座椅和電子系統市場目標的長期成長充滿信心。我們實施了 Lear Forward 計劃，所節省的費用超出了我們的初始目標。我們今年的重點是加速自動化，以解決薪資上漲問題並提高工廠的效率。

In 2024, bringing innovative products to market and executing our strategy will allow us to continue to return capital to shareholders and position Lear for a long-term success. Now we'd be happy to take your questions.

到 2024 年，將創新產品推向市場並執行我們的策略將使我們能夠繼續向股東返還資本，並使李爾取得長期成功。現在我們很樂意回答您的問題。

(Operator Instructions) Our first question today comes from Rod Lache from Wolfe Research.

（操作員說明）我們今天的第一個問題來自 Wolfe Research 的 Rod Lache。

Two questions on the guide. Just first of all, versus the second half of 2023 run rate and looking out to 2024, you've got about $1.1 billion of revenue growth at the midpoint and your segments are expected to deliver about $120 million of additional EBIT. Is that roughly the conversion rate that we should be expecting now as more of the growth is coming from backlog, maybe 10% or 11%? And can you maybe just -- Jason, in the past, you've given us a pretty helpful bridge on how you get to the targets, the 7% total company, 8% segments. Can you just refresh us as we look out beyond 2024, how that sort of looks?

關於指南的兩個問題。首先，與 2023 年下半年的運行率相比，並展望 2024 年，中點收入增長約為 11 億美元，並且您的部門預計將帶來約 1.2 億美元的額外息稅前利潤。這是否是我們現在應該預期的轉換率，因為更多的成長來自於積壓，也許是 10% 或 11%？你能否——傑森，過去，你為我們提供了一個非常有用的橋樑，幫助我們實現目標，即公司總數的 7%、細分市場的 8%。當我們展望 2024 年後的情況時，您能否讓我們耳目一新？

Rod, as the backlog is the primary near-term driver of growth in revenue, we would expect that to convert sort of 10% to 12%. I think we're right in line with that with our guidance for this year. We do believe that there is room for volume increases on existing platforms, and those will continue to convert at our typical variable margin in both segments, 15% to 20% in Seating and 25% roughly in E-Systems.

Rod，由於積壓訂單是近期營收成長的主要驅動力，我們預計這一比例將達到 10% 至 12%。我認為我們今年的指導方針是正確的。我們確實相信，現有平台的銷量還有增加的空間，並且這些平台將繼續以我們典型的可變利潤率在這兩個領域進行轉換，座椅領域為15% 至20%，電子系統領域約為25%。

As we look at this year, we're not anticipating volume increases on existing platforms. In fact, we have included volume reductions on a number of existing platforms in our guidance, largely aligned with the S&P forecast. So there's definitely room for that to improve even this year and certainly beyond this year.

展望今年，我們預期現有平台的銷售量不會增加。事實上，我們已將一些現有平台的交易量減少納入我們的指導中，這在很大程度上與標準普爾的預測一致。因此，即使是今年，而且肯定會超出今年，這方面肯定還有改進的空間。

In terms of your question on 2025, Rod, I really want to stay focused on 2024 at this stage. The last time we talked about 2025, it was in the middle of last year in Seating. We talked about 8% at our Seating Investor Day. And there's 2 or 3 things have changed since then. One, wage inflation and transactional FX a little bit more of a headwind than what we had anticipated at that point. EV volumes and the transition to EVs are a little bit slower than what we had anticipated. But we're also moving faster on automation and efficiencies in our plants and active negotiations with our customers. So it's a little bit difficult to try and call '25 with pinpoint accuracy at this stage. We're super focused on delivering or exceeding our 2024 guidance in both businesses.

關於你關於 2025 年的問題，Rod，我真的想在現階段繼續關注 2024 年。上次我們談2025年是在去年年中的Seating。我們在座位投資者日討論了 8%。從那時起，有兩三件事發生了變化。第一，薪資通膨和交易性外匯的阻力比我們當時的預期要大一些。電動車的銷售量和向電動車的過渡比我們的預期慢一些。但我們也在工廠的自動化和效率方面加快步伐，並與客戶積極談判。因此，現階段嘗試精確地呼叫 '25 有點困難。我們非常專注於實現或超越這兩項業務的 2024 年指導目標。

Okay. And just aside from production, maybe you can just give us a little bit of color as you look out to 2024. What are the biggest potential sources of upside or downside versus the midpoint of your plan?

好的。除了生產之外，也許您可以在展望 2024 年時為我們提供一些資訊。與計劃的中點相比，最大的潛在上行或下行來源是什麼？

Yes. So as we look at our guidance for this year, I think one of the biggest challenges we have is in regards to wage inflation. So maybe just spend a minute on that. As we've talked about in the past, it's sort of 3% or 4% annual wage inflation is sort of normal. We offset that through our efficiency programs in our plants, and it's certainly running considerably beyond that at this stage, roughly 2x what we've experienced historically.

是的。因此，當我們審視今年的指導時，我認為我們面臨的最大挑戰之一是薪資通膨。所以也許只花一分鐘的時間。正如我們過去談到的，每年工資上漲 3% 或 4% 是正常的。我們透過工廠的效率計劃來抵消這一影響，而且現階段的運行速度肯定遠遠超出了這個水平，大約是我們歷史經驗的兩倍。

And if you look at our businesses, just kind of taking a step back, the impact ranges from negligible on a business like electronics, which has almost no labor, it's very automated, (inaudible) Seating, it's a relatively modest impact. But our more labor-intensive businesses like cut and sewn trim which is 35% of the seating headcount. Wire assembly is 90% of the E-Systems headcount. Those are where we're seeing the greatest impact.

如果你看看我們的業務，退一步看，對於像電子產品這樣的業務來說，影響可以忽略不計，因為幾乎沒有勞動力，它非常自動化，（聽不清）座位，這是一個相對較小的影響。但我們的勞力密集業務例如裁剪和縫製裝飾，佔座位總數的 35%。電線組裝佔 E-Systems 員工總數的 90%。這些是我們看到影響最大的地方。

Those also tend to be businesses that have model pricing with our customers with explicit assumptions or around labor rates, which gives us a path to eventually recovering that either directly this year or as those programs turn over. Certainly, we would expect full recovery. And we really think that '24 represents the peak in terms of the impact of wage inflation because globally inflation peaked last year, and now you're seeing the full effect of that in our labor costs. And so we would expect that to moderate next year.

這些企業也往往是透過明確的假設或圍繞勞動力價格與客戶進行模型定價的企業，這為我們提供了一條最終在今年直接或在這些計劃結束後恢復的途徑。當然，我們期望完全康復。我們確實認為 24 年代表了工資通膨影響的峰值，因為去年全球通膨達到頂峰，現在你可以看到它對我們勞動成本的全面影響。因此，我們預計明年這種情況將會放緩。

We did see higher labor inflation last year as well, just kind of look at from '22 to '23, we had a step up of roughly $60 million. We've managed to offset that largely through 4 initiatives in addition to our normal efficiency programs. We had an aggressive restructuring program, moving work to -- from Eastern Europe to North Africa, from the border in Mexico, further inland. Through automation, the acquisitions of [ASI], InTouch and Thagora really aggressively deploying automation. The Lear Forward plan, which is improving capacity utilization in North Africa and Mexico and then customer recoveries passing that through to our customers.

去年我們確實也看到了更高的勞動力通膨，從 22 年到 23 年，我們的勞動力通膨增加了約 6,000 萬美元。除了正常的效率計劃之外，我們還透過 4 項措施很大程度上抵消了這一影響。我們制定了積極的重組計劃，將工作從東歐轉移到北非，從墨西哥邊境轉移到更內陸的地區。透過自動化，收購 [ASI]、InTouch 和 Thagora 確實正在積極部署自動化。李爾向前計劃，該計劃正在提高北非和墨西哥的產能利用率，然後將客戶恢復傳遞給我們的客戶。

So I think there may be some upside to the assumption we've made around economics, either in terms of the absolute cost or the recovery. And in addition to that, what we're doing in terms of our automation programs and Ray could talk a little bit more about that. I mean there's no one more focused and passionate on this topic, I think, in the industry than Ray.

因此，我認為我們圍繞經濟學所做的假設可能有一些好處，無論是在絕對成本還是復甦方面。除此之外，我們在自動化程序方面正在做的事情，雷可以多談談這一點。我的意思是，我認為，在這個行業中，沒有人比雷更專注和熱衷於這個主題了。

Yes. Rob, I'll share some stories with you too next week publicly, but I couldn't -- been in our facilities. I think the technology, the innovation, the things that we put in place when you talk about upside, I think that's a potential accelerator. What I'm seeing with the pilot lines we put in place. Around the areas, Jason mentioned, our labor focused priorities are around trim and wiring. And what I saw in our wiring facilities, we're automating and doing a great job with some of the efficiencies that we're getting in our plants.

是的。羅布，下週我也會公開與你分享一些故事，但我不能──在我們的設施裡。我認為技術、創新以及我們在談論積極方面時所採取的措施，我認為這是一個潛在的加速器。我在我們建立的試點線路中看到了什麼。傑森提到，在這些領域，我們以勞動力為重點的優先事項是裝飾和佈線。我在我們的佈線設施中看到，我們正在實現自動化，並且在我們工廠的一些效率方面做得很好。

And to mention, I think what's important, too, the capital that we're looking at is significantly lower cost. So it's not only improving from an efficiency within our plants, the capital that's coming online is significantly lower than what we're seeing from traditional capital. So we're getting 2, I think, really good benefits you saw in that last year in our capital spend. And I think that's going to continue to accelerate.

值得一提的是，我認為同樣重要的是，我們正在尋找的資本成本顯著降低。因此，這不僅提高了我們工廠的效率，而且線上資本也大大低於我們從傳統資本中看到的資本。因此，我認為，我們在去年的資本支出中獲得了 2 個非常好的效益。我認為這將繼續加速。

I think the negotiations with our customers. We take a very balanced approach to the year, starting off in January. We're in heavy discussions with our customers on all kinds of different issues relative to the pause in EVs to what we're seeing with labor economics. I think we're balanced. I think some of those, we're going to be very aggressive on those, I think, could help significantly. Quicker than maybe within the second half of this year that -- but we do take a balanced approach.

我認為與我們的客戶談判。從一月開始，我們對這一年採取了非常平衡的態度。我們正在與客戶就各種不同的問題進行深入討論，這些問題涉及電動車的暫停以及我們在勞動力經濟學方面所看到的情況。我認為我們是平衡的。我認為其中一些，我們將非常積極地進行，我認為，可以提供很大的幫助。可能比今年下半年要快——但我們確實採取了平衡的方法。

In the beginning, I think volume. I think we've looked at volume very conservatively. I think -- right now, our customers are retrenching a little bit with this pause in EV. We're hearing a lot from our -- inside the customers of how they're going to look at their powertrains, what that might impact as far as ICE vehicles. We've gotten some feedback that they'll formalize it here in the near future. If ICE continues to accelerate in some of our platforms that we've been a little bit more bearish on because that's the information we have. That's a nice little tailwind for us.

一開始，我想到的是數量。我認為我們對交易量的看法非常保守。我認為，目前，由於電動車領域的暫停，我們的客戶正在稍微縮減開支。我們從客戶內部聽到了很多關於他們將如何看待他們的動力系統，以及這可能對內燃機汽車產生什麼影響。我們收到了一些回饋，他們將在不久的將來在這裡正式化。如果 ICE 繼續在我們的一些平台上加速，我們會更加悲觀，因為這就是我們所掌握的資訊。這對我們來說是一個很好的小順風。

So I think we have some opportunities here, but we are pushing them very aggressively, but we do have a very balanced approach, especially coming out in January, Rod. We've been absorbing a lot of these EV changes quickly and then really giving a little bit more bearish look to what the alternatives will be. And so that could be a nice boost for us.

所以我認為我們在這裡有一些機會，但我們正在非常積極地推動它們，但我們確實有一個非常平衡的方法，特別是在一月份出現，羅德。我們一直在快速吸收電動車的許多變化，然後對替代方案的看法更加悲觀。所以這對我們來說可能是一個很好的推動。

Our next question comes from Dan Levy from Barclays.

我們的下一個問題來自巴克萊銀行的丹·利維。

Wanted to go back to continue the line of questions on the guide. And maybe you could just comment a bit on 2 components in there. One is, I think you said $70 million of FX in there. Is that just purely transactional? Does that just reflect hedges unwinding? And maybe you could talk about -- I think you mentioned it briefly on the commercial recoveries piece. But what are you assuming as far as pricing within each of the segments? Is this returning to the typical, call it, 1.5% price downs in Seating, 2-ish percent in E-Systems. So maybe just some commentary on the pricing environment as well.

想回去繼續指南上的問題。也許您可以對其中的兩個組件發表一些評論。一是，我想你說裡面有 7000 萬美元的外匯。這只是純粹的交易嗎？這是否僅僅反映了對沖的解除？也許你可以談談——我想你在商業追償文章中簡短地提到這一點。但對於每個細分市場的定價，您有何假設？這是否又回到了典型的情況，即座椅價格下降 1.5%，電子系統價格下降 2% 左右。所以也許只是對定價環境的一些評論。

Sure. Let me start with FX. And it may be helpful just to kind of take a step back and explain our transactional FX exposures overall in our strategy. So the Mexican peso is our most significant exposure by far. We have had a little more than $1 billion. I think $1.1 billion is the exposure last year, that grows to $1.2 billion or so in 2024. And we have a very effective hedging program, which really protected us last year and also helps us again this year.

當然。讓我從外匯開始。退一步並解釋我們策略中的整體交易外匯敞口可能會有所幫助。因此，墨西哥比索是我們迄今為止最重要的曝險。我們有略高於 10 億美元的資金。我認為去年的風險敞口為 11 億美元，到 2024 年將增長到 12 億美元左右。我們有一個非常有效的對沖計劃，它去年確實保護了我們，今年也再次幫助了我們。

And that can go through all the details of the program for competitive reasons, but I will say generally, we layer on hedges on a multiyear basis. And at the beginning of last year and again the beginning of this year, we had hedges in place for roughly 85% of our exposure, including the peso. And this -- again, that served us very well last year in particular. Transactional FX on the Mexican peso negatively impacted operating margins and earnings last year by 10 basis points and $20 million, respectively. So it was fairly insignificant in terms of the operating margin impact.

出於競爭原因，這可以涵蓋該計劃的所有細節，但我一般來說，我們會在多年的基礎上進行對沖。去年年初和今年年初，我們對大約 85% 的風險敞口（包括比索）進行了對沖。再說一次，這對我們很有幫助，尤其是去年。墨西哥比索的交易性外匯對去年的營業利潤和收益分別造成了 10 個基點和 2,000 萬美元的負面影響。因此，就營業利潤率影響而言，這是相當微不足道的。

There was another $10 million of exposure on balance sheet-related FX expense that hit in the other line, which impacted EBIT by another $10 million. So the Mexican peso overall between operating earnings and other expense impacted EBIT by $30 million last year. And the balance sheet portion that was really loaded -- back-end loaded in the fourth quarter where there's a lot of volatility with the peso and that really weighed on earnings per share, it's about a $0.10 impact. Overall, FX was a $0.10 impact on earnings per share in the fourth quarter.

另外 1000 萬美元的資產負債表相關外匯支出也影響了另一條線，這又影響了 EBIT 1000 萬美元。因此，去年營業收入和其他費用之間的墨西哥比索整體影響息稅前利潤 3,000 萬美元。資產負債表部分真正承受了壓力——第四季度的後端壓力，比索波動很大，這確實影響了每股收益，影響約為 0.10 美元。總體而言，外匯對第四季度每股收益的影響為 0.10 美元。

As we look out at this year, overall, our guidance, as we talked about in the prepared remarks, includes $70 million impact on operating earnings are just under 30 basis points, 31 basis points in Seating, a little over 20 basis points in E-Systems. 60 of that 70 is driven by the peso which we've assumed will average about [17.25]. So the exposed portion, the 15%, we've assumed a rate of 17.25 , that's pretty much where it's been trading over the last several months. And then we've assumed a further $30 million of impact on our balance sheet exposure. So the guidance includes $100 million total transactional FX impact of which $60 million or 60% of that is peso related.

展望今年，總體而言，正如我們在準備好的發言中談到的，我們的指導包括7000 萬美元，對營業利潤的影響略低於30 個基點，對座位的影響為31 個基點，對E的影響略高於20 個基點-系統。這 70 個中的 60 個是由比索驅動的，我們假設比索的平均價格約為 [17.25]。因此，暴露部分，即 15%，我們假設匯率為 17.25，這幾乎就是過去幾個月的交易水準。然後我們假設我們的資產負債表風險進一步受到 3000 萬美元的影響。因此，該指引包括 1 億美元的總交易外匯影響，其中 6,000 萬美元或 60% 與比索相關。

Lastly, I think it's important to highlight that the peso appreciation is also embedded in our labor inflation. And so as we're talking to our customers about recovery of this kind of excess wage economics, there's an FX component of that as well. And ultimately, as those models or [reset] to reflect current exchange rates, current labor rates, we would expect the full recovery of that to take place. So some of that this year and then some of it beyond this year.

最後，我認為重要的是要強調比索升值也包含在我們的勞動力通膨中。因此，當我們與客戶談論這種超額工資經濟的復甦時，其中也有外匯成分。最終，當這些模型或[重置]以反映當前匯率、當前勞動價格時，我們預期會出現全面復甦。今年有一些，今年以後也有一些。

And that's a little bit of what's weighing on seating margins and really margins in both segments in 2024. So you're not seeing the full benefit of all the operating improvements because it's being diluted by both wage inflation and transactional FX. In terms of our customer price downs, we're expecting a similar environment in '24 than what we experienced in '23. Your math is pretty close there in terms of 1.5%, maybe a little bit less than that. But it's important to note that there's a basket of issues that you're negotiating. And so there may be some direct reduction of that as a result of our labor inflation discussions, FX discussions, low volume discussions, EV program delay discussions and even lingering commodities that have not been recovered from the prior year.

這對 2024 年兩個細分市場的座位利潤率和實際利潤率造成一定影響。因此，您看不到所有營運改善的全部好處，因為它被工資通膨和交易性外匯稀釋。就我們的客戶價格下降而言，我們預計 24 年的環境將與 23 年類似。你的數學計算結果非常接近 1.5%，也許比這個低一點。但值得注意的是，您正在談判一系列問題。因此，由於我們的勞動力通膨討論、外匯討論、低交易量討論、電動汽車計劃延遲討論，甚至尚未從上一年恢復過來的揮之不去的大宗商品，可能會出現一些直接的減少。

So all of that is in play as we negotiate with our customers. But if you see this year playing out, you have that contractual price down that's baked into your first quarter outlook. You had the effects of wage inflation largely hitting at the beginning of the year and that will weigh on margins at the start of the year. And then throughout the year, we look to claw that back through those negotiations and through the execution of our operating improvement plans.

因此，所有這些都在我們與客戶談判時發揮作用。但如果你看到今年即將結束，你就會將合約價格下調，並將其納入你的第一季展望中。薪資通膨的影響在年初就已嚴重顯現，這將影響年初的利潤率。然後在這一年裡，我們希望透過這些談判和執行我們的營運改善計畫來挽回這一局面。

Great. And as a follow-up, I wanted to ask about the EV strategy. And I see on your slide that talks about the strategic initiatives there's a comment here realigning resources under E-Systems, realigning resources due to changes in EV volumes. Maybe you can just talk about what specifically you are doing within E-Systems to align to this new environment. How much was weaker EVs wait on the backlog? And you issued this 8% target on E-Systems margin. How much does lower EV environment limit your ability to get to that 8% 2025 target in margins?

偉大的。作為後續行動，我想問電動車戰略。我在談到策略性舉措的幻燈片上看到，這裡有一條評論，內容是重新調整電子系統下的資源，根據電動車數量的變化重新調整資源。也許您可以只談談您在電子系統中具體做了哪些工作來適應這個新環境。較弱的電動車在積壓訂單上等了多少時間？你們對電子系統利潤率設定了 8% 的目標。較低的電動車環境對您實現 2025 年 8% 利潤率目標的能力有何限制？

Yes. And certainly, the biggest factor that led to a lower 2024 backlog and to a certain extent, the 2025 backlog is our assumptions around electric vehicle volumes, the timing of launches. So in 2024, in particular, we had guided to $1.5 billion backlog. It's now $1.2 billion. I would say, within our guidance range, that could be anywhere from $1.1 billion to $1.3 billion, just depending on how closely the customers are -- achieved their ramp-up schedules and their volumes, which are still in flux. And so that -- yes, that is weighing on the backlog a little bit here in 2024, and it's weighing on operating margins a bit in E-Systems probably more so than in Seating.

是的。當然，導致 2024 年積壓訂​​單減少以及在某種程度上 2025 年積壓訂​​單減少的最大因素是我們對電動車數量和推出時間的假設。因此，特別是在 2024 年，我們預計積壓金額為 15 億美元。現在是12億美元。我想說，在我們的指導範圍內，這個數字可能在 11 億美元到 13 億美元之間，這取決於客戶的成長計畫和數量的實現情況，而這些都仍在不斷變化。因此，是的，這對 2024 年的積壓訂單造成了一些壓力，而且對電子系統的營運利潤率的影響可能比座椅方面更大。

And similar to the question Rod asked earlier in terms of 2025, I don't want to get into a pinpoint margin discussion on 2025. What we've talked about publicly of late with E-Systems is an 8% target. I think in a recent investor conference, I talked about '25, '26, maybe pushing that out a little bit just because of the lower EV volumes in the near term. And so as the year progresses, we'll provide more color on '25, but certainly, that -- the lower volumes will have an impact on E-Systems margins there.

與 Rod 早前提出的 2025 年問題類似，我不想對 2025 年的利潤率進行精確的討論。我們最近與 E-Systems 公開討論的是 8% 的目標。我認為在最近的一次投資者會議上，我談到了“25”、“26”，可能只是因為短期內電動車銷量較低而將其推遲了一點。因此，隨著時間的推移，我們將在 25 年提供更多的色彩，但可以肯定的是，銷量的下降將對電子系統的利潤產生影響。

In terms of what we're doing in response to the lower volumes, it's a combination of operating actions and commercial actions. And we've -- you see what happened with capital spending at the end of last year. We had guided to $675 million. We spent $50 million less than that. We went back to every single program, not just in E-Systems, but in Seating and reevaluated the deployment of additional capacity and found tremendous opportunity to pause a lot of that spending. So that will really help kind of near-term returns in both segments, and I think better positioned us for a slower ramp up. And we're doing that in collaboration with our customers.

就我們為因應銷售下降而採取的行動而言，這是營運行動和商業行動的結合。我們——你看到去年年底資本支出發生了什麼事。我們的目標是 6.75 億美元。我們比這個少花了 5000 萬美元。我們回顧了每一個項目，不僅在電子系統方面，而且在座位方面，並重新評估了額外容量的部署，並發現了暫停大量支出的巨大機會。因此，這確實有助於這兩個領域的短期回報，而且我認為這可以更好地幫助我們實現緩慢的成長。我們正在與客戶合作做到這一點。

Our customers are being very open about changes to their plans, and they're working with us to try and slowdown that capital deployment so that they don't have that excess capital and the supply base to worry about as well. And so -- and then there's a commercial negotiation element to it as volumes are lower certainly, we're having discussions with all of our customers about the impact on fixed overhead and investments that had been made previously that will result in higher prices until those volumes come back.

我們的客戶對計劃的改變持非常開放的態度，他們正在與我們合作，嘗試放慢資本部署，這樣他們就不用擔心多餘的資本和供應基礎。因此，由於銷售肯定較低，因此存在商業談判因素，我們正在與所有客戶討論對固定管理費用和先前進行的投資的影響，這將導致價格上漲，直到這些卷回來了。

I also think what was important, and we talked about this with E-Systems is simplifying the product portfolio and seeing a little bit this even before it occurred. I mean, obviously, it was a much more dramatic pullback or pause as (inaudible) call with EVs, but we were ahead in some respects of really limiting what capital we'll be deploying. And I think equally as important where we're investing our capital -- our dollars and then also scaling certain products. When we talk about a BDU, it can be a very scalable program across multiple customers, same thing within ICB.

我還認為重要的是，我們與 E-Systems 討論過這一點，即簡化產品組合，並在其發生之前就看到這一點。我的意思是，顯然，這是一個更戲劇性的回調或暫停（聽不清楚），但我們在某些​​方面處於領先地位，真正限制了我們將部署的資本。我認為同樣重要的是我們投資我們的資金——我們的美元，然後擴大某些產品的規模。當我們談論 BDU 時，它可以是跨多個客戶的非常可擴展的計劃，ICB 內也是如此。

And so I say it all the time, not trying to be everything to everybody investing in all kinds of different solutions, but being very, very disciplined and selective on where we will deploy capital and being very good at it. And I think that's helped us. I mean we still have more work to do, like Jason said on the commercial negotiation with some of these more dramatic changes within EVs, but we have that type of relationship with our customers that we are seen as an expert. And we didn't deploy capital at the request of a particular volume to hit a run rate. It was very, very selective, intentional. And so I think that helped. But simplifying that product portfolio in E-Systems has really helped us as this pause has come at us over the last really 3 months.

所以我一直這麼說，並不是試圖成為每個人投資各種不同解決方案的一切，而是在我們將資本部署的地方非常非常有紀律和有選擇性，並且非常擅長。我認為這對我們有幫助。我的意思是，我們還有更多的工作要做，就像傑森在與電動車中的一些更劇烈的變化進行商業談判時所說的那樣，但我們與客戶的關係使我們被視為專家。我們並沒有根據特定數量的要求來部署資金以達到運行率。這是非常非常有選擇性、有意為之的。所以我認為這有幫助。但簡化電子系統中的產品組合確實對我們有幫助，因為我們在過去 3 個月裡出現了這種停頓。

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

我們的下一個問題來自美國銀行的約翰·墨菲。

I got 3 very quick ones. First, if I said that global vehicle production was going to be up roughly 2% this year as opposed to down 1% and took the midpoint of your range, it would probably add about $700 million, maybe just a little bit more to the revenue outlook. If you think about that incremental $700 million and assume all else equal, what kind of contribution margin would you ascribe to that? I mean, because when you look at the low end and the high end of the range, it's indicating a 25% contribution margin base. So Jason trying to understand what you would think of on something like that. And assuming a lot of this is coming in existing programs that do better than you -- you're forecasting right now or the industry is expecting?

我得到了 3 個非常快的。首先，如果我說今年全球汽車產量將成長約 2%，而不是下降 1%，並取範圍的中點，則可能會增加約 7 億美元，也許只是增加一點點收入外表。如果您考慮增量 7 億美元並假設其他條件相同，您會認為這會帶來什麼樣的邊際貢獻？我的意思是，因為當你查看該範圍的低端和高端時，它表明貢獻邊際基數為 25%。所以傑森試著去了解你對這樣的事情會有什麼想法。假設其中許多都出現在比你做得更好的現有計畫中——你現在的預測還是產業的預期？

Yes. So we would expect -- if volumes on existing platforms come in $700 million better, we would convert it at 15% to 20% in Seating and 25% or so in E-Systems, depending on the underlying profitability of the platforms that come back, the level of vertical integration that we have in the platforms as well. I would say that some of that volume would be on backlog programs, though, John, so that may convert at a little bit lower rate. In that first year of production sort of 10% to 15% probably. And that's where some of the guidance range is earmarked for, so to speak, is some of the uncertainty around these new EV platforms.

是的。因此，我們預計，如果現有平台的銷量提高 7 億美元，我們會將其轉換為座椅 15% 至 20%，電子系統 25% 左右，具體取決於回歸平台的基本盈利能力，我們在平台中的垂直整合水平。不過，約翰，我想說其中一些卷將用於積壓計劃，因此轉換率可能會稍低一些。第一年的產量可能為 10% 到 15%。這就是一些指導範圍被指定的地方，可以說，是這些新電動車平台的一些不確定性。

The other factor and the reason for a little bit higher conversion on the range is the commercial negotiations around inflation and the pace at which we can deploy our automation projects to offset wage inflation. So we've got a little wider range than we normally would have. It's fairly tight in seating sort of 6%, 7% to 7%. But in E-Systems, it's a little bit wider range, 6% at the (inaudible) 5% to 6% to 5.1% to 6% in E-Systems to sort of account for the impact of those commercial negotiations and the pace of deployment of automation.

另一個因素以及該範圍內轉換率稍高的原因是圍繞通膨的商業談判以及我們部署自動化項目以抵消工資通膨的速度。所以我們的範圍比平常要寬一些。座位相當緊張，只有 6%、7% 到 7%。但在電子系統中，範圍有點寬，6%（聽不清楚）5% 到 6% 到 5.1% 到 6%，以考慮到這些商業談判的影響和進展的步伐。自動化部署。

That's very helpful. And then a second quick one here on the backlog. It seems like you guys have dinged and hit the backlog reasonably hard for EV push down and out, but have not taken the liberty and have not seen this necessarily from your customers of backfilling that lost volume with ICE programs. Is that a fair statement in the way you've approached the recoup of the backlog and there's not a backfill or a significant backfill of these ICE vehicles from actually transacting and being sold and taking the place of those?

這非常有幫助。然後是關於積壓的第二個快速任務。看來你們對電動車的推倒和淘汰已經相當努力地解決了積壓問題，但沒有採取自由行動，也沒有從你們的客戶那裡看到這一點，用 ICE 計劃來彌補損失的數量。從您處理積壓訂單回收的方式來看，這是一個公平的說法嗎？這些 ICE 車輛沒有因實際交易、出售和取代而出現回填或大量回填嗎？

Yes, that's effectively what we've done because it's a fairly conservative approach, but we've taken our customers' guidance in terms of their plans to balance out some of their ICE platforms as they ramp up their EV platforms. And then we've taken a bit of a conservative view on the volumes of some of the new EV platforms. So we may have sort of double dipped a little bit there. I'll just give you a couple of examples. We have the Blazer ICE seating, but we don't have the Blazer EV seating. So GM's plan as it sits right now, has the Blazer building out next year.

是的，這實際上就是我們所做的，因為這是一種相當保守的方法，但我們已經聽取了客戶的指導，以平衡他們的一些 ICE 平台，同時擴大他們的電動車平台。然後，我們對一些新電動車平台的銷售採取了保守的看法。因此，我們可能會出現一點點雙重下跌。我只舉幾個例子。我們有 Blazer ICE 座椅，但沒有 Blazer EV 座椅。因此，通用汽車目前的計劃是明年生產 Blazer。

So that's a backlog hit in seating that may get pushed out. And there are several programs like that, Ford with the Aviator. That is assumed to build out on the ICE side and then it launches as a [need] to be in a different plant that we -- where we don't have the production contract. So I think that is sort of maybe a hidden upside to the 2025 backlog because of our sort of mechanical approach that we follow when we establish the backlog if the customer tells us the program is building out, then we take it out of backlog. Another example on E-Systems side, the Ford, the focus is assumed to begin winding down in 25 and it's gone in '26. There isn't a replacement for that at this stage. So that's a negative to the backlog. So there's a handful of programs like that, that could lead to some kind of underlying upside in the backlog when we post that number 12 months from now.

因此，座位積壓可能會被推遲。還有幾個類似的項目，例如福特的飛行員。假設這是在 ICE 方面建立的，然後根據需要在我們沒有生產合約的不同工廠啟動。因此，我認為這可能是 2025 年積壓的一個隱藏的好處，因為我們在建立積壓時遵循的機械方法是，如果客戶告訴我們該計劃正在建設中，那麼我們會將其從積壓中刪除。電子系統方面的另一個例子是福特，預計焦點將在 25 年開始逐漸減少，但在 26 年就消失了。現階段還沒有替代品。所以這對積壓是不利的。因此，有一些類似的計劃，當我們在 12 個月後發布這個數字時，可能會導致積壓工作出現某種潛在的上升趨勢。

Yes, I think our customers do over the -- probably the first 2 quarters to start clarifying the specifics around those type of situations. And we did take, like Jason said, a more balanced conservative approach given the information we have. And if there is movement, and that said, not formally, but informally, we've gotten some feedback that they are internally across the board looking at how they're going to position between hybrid electric vehicles and the continuation in some cases of the ICE vehicles. And what's nice about the continuation of ICE vehicles, those are usually longer in the tooth. We're usually doing a really nice job efficiently. And so we're with you. We hope to keep running those things. So -- but we will -- I think we'll get more clarity over the next couple of quarters here as they start to kind of rebalance their own internal strategies.

是的，我認為我們的客戶可能會在前兩個季度開始澄清此類情況的具體情況。正如傑森所說，鑑於我們掌握的信息，我們確實採取了更平衡的保守方法。如果有任何進展，也就是說，不是正式的，而是非正式的，我們收到了一些反饋，他們正在內部全面考慮如何在混合動力電動車和某些情況下的延續之間進行定位。內燃機車輛。內燃機汽車的延續有一個好處，那就是這些汽車的使用壽命通常更長。我們通常都非常有效率地完成工作。所以我們和你在一起。我們希望繼續經營這些事。所以 - 但我們會 - 我認為在接下來的幾個季度中，隨著他們開始重新平衡自己的內部策略，我們會變得更加清晰。

John, just to add one comment to that. And with both businesses sort of being [power trade] agnostic. If that happens, I think it's generally positive for us to raise (inaudible) just to reinforce that running that capital for a year or 2 years, 3 years longer than we initially planned. It's good for operating margins, good for ROIC and on balance, good for Lear overall.

約翰，我只想對此添加一條評論。這兩家公司都與[電力貿易]無關。如果發生這種情況，我認為籌集（聽不清楚）對我們來說通常是積極的，只是為了加強該資本的運作一年或兩年，比我們最初計劃的時間長三年。這有利於營業利益率，有利於投資資本報酬率，總的來說，有利於李爾整體。

I definitely agree with you. And then just lastly on the buyback Jason, what was the average price you bought back the shares? I apologize, in the fourth quarter? I missed that. And as I look at the operating cash flow expectation for this year and just apply that 22% cap allocation you did last year, it looks like there'd be $300 million, maybe a little bit more in buybacks that might be earmarked. I mean, I know you're not doing it that directly, but it seems like that would be the number. So what was the average price in the fourth quarter and the buyback number you would think of for '24?

我絕對同意你的觀點。最後，關於回購，傑森，您回購股票的平均價格是多少？抱歉，第四季？我錯過了。當我查看今年的營運現金流預期並僅應用去年進行的 22% 上限分配時，看起來將有 3 億美元，甚至可能會多一點用於指定用途的回購。我的意思是，我知道你不會直接這樣做，但看起來就是這個數字。那麼，您認為 24 年第四季的平均價格和回購數量是多少？

Yes. I'll start with the second part as the guys in the room scramble to find that number for, I think it's in the mid-130s. So we would -- we fully expect to continue to be aggressive in buying back stock and to be opportunistic as there's sort of this dislocation in value in the near term. And if you look at the free cash flow, we're going to generate in '24, which is greater than '23. There's no near-term M&A of any significance on the horizon. We do have a term loan. We could take a look at that's tied to the IGB acquisition, but we're rush to pay that down.

是的。我將從第二部分開始，房間裡的人爭先恐後地尋找那個數字，我認為它在 130 年代中期。因此，我們完全期望繼續積極回購股票，並抓住機會，因為短期內價值會出現某種錯位。如果你看一下自由現金流，我們將在 24 年產生，這將大於 23 年。短期內沒有任何重大的併購活動。我們確實有定期貸款。我們可以看看與 IGB 收購有關的費用，但我們急於支付這筆費用。

So I think share repurchases sort of in that 4% of shares outstanding again range is a reasonable target. Of course, we're being with our Board next week, that's a Board decision. And we're certainly advocating for that, and the board has been very supportive of that in our recent meeting. So I'd expect that to continue.

因此，我認為在 4% 的流通股範圍內回購股票是合理的目標。當然，我們下週將與董事會會面，這是董事會的決定。我們當然提倡這一點，而且董事會在我們最近的會議上也非常支持這一點。所以我預計這種情況會持續下去。

Yes. Our focus is driving free cash flow. And we're going to convert at our target or higher, and we're going to return it to the shareholders. I mean we're going to -- what's nice is right now, we talk about innovation technology on the plant floors. We acquired some small tuck-ins with Thagora, ASI, InTouch, and boy, they made a dramatic difference. And it's not extremely costly when we talk about this capital deployment, we're doing it at a lower cost. And we're seeing that capital come in significantly lower, and we're deploying it in a life or with new launches.

是的。我們的重點是推動自由現金流。我們將按照我們的目標或更高的目標進行轉換，並將其返還給股東。我的意思是，我們將 - 現在很好的是，我們討論工廠車間的創新技術。我們與 Thagora、ASI、InTouch 進行了一些小整合，天哪，它們產生了巨大的影響。當我們談論這種資本部署時，成本並不是很高，我們正在以較低的成本進行。我們看到資本的流入明顯減少，我們將其部署在生活中或新產品的推出中。

So we're going to be very, very focused on our working capital, how we're converting our cash flow and we're in a really good position. We've been doing this for several years. So when I'm going out the plant and seeing this, what's really nice in this WS launch, we just went through, unprecedented, never done before in the history of seating. We had our capital. We wouldn't even take the capital from our competitor because it was that bad from a throughput standpoint and how it was working within their facility. We launched that plant with our technology innovation, low capital cost much more efficient. We produce more output than they could produce -- ever produced in their 3 years of trying to hit their daily volumes. And what was great about it. And Frank here, the team did a remarkable job was our quality from our customer said it was superior to our competitor that was producing those parts for years.

因此，我們將非常非常關注我們的營運資金，我們如何轉換我們的現金流，我們處於一個非常有利的位置。我們這樣做已經好幾年了。因此，當我走出工廠看到這一點時，我們剛剛經歷了這次 WS 發布的真正精彩之處，這是前所未有的，在座椅歷史上從未做過。我們有我們的資本。我們甚至不會從競爭對手那裡獲取資金，因為從吞吐量的角度以及它在他們的設施內的運作方式來看，這實在是太糟糕了。我們憑藉技術創新推出了該工廠，資本成本低，效率更高。我們的產量比他們所能生產的還要多——他們三年來試圖達到每日產量的產量。這有什麼好處呢？弗蘭克在這裡，團隊做得非常出色，我們的客戶說我們的品質優於我們多年來生產這些零件的競爭對手。

And so that gives me excitement because I'm looking at this technology in the plants and the more manufacturing company, we produce parts. That acceleration of innovation technology that we've been driving for multiple years is starting to really take hold. And it's about -- we don't need anything. We've made some nice acquisitions. There's nothing on the horizon like Jason said. And we'll walk out this meeting. We're going to go to how we're going to drive more cash flow. So that's what we're going to stay focused on.

這讓我很興奮，因為我正在工廠和更多的製造公司中研究這項技術，我們生產零件。我們多年來一直在推動的創新技術的加速正在開始真正紮根。這是關於——我們不需要任何東西。我們進行了一些不錯的收購。沒有任何事情像傑森所說的那樣。我們將結束這次會議。我們將討論如何推動更多現金流。這就是我們將繼續關注的重點。

And John, your first question there, [$135.67] was the average price in the quarter.

約翰，你的第一個問題是，[135.67 美元] 是該季度的平均價格。

Right, just that WS program, that's a Grand Wagoneer and the Wagoneer's what you mentioned in that takeover. That's what you were just discussing guys. I appreciate it.

是的，就是那個 WS 程序，那就是 Grand Wagoneer，Wagoneer 就是您在接管中提到的。這就是你們剛才討論的事情。我很感激。

Our next question comes from James Picariello from BNP Paribas.

我們的下一個問題來自法國巴黎銀行的 James Picariello。

Just to focus on this year's volume mix assumptions relative to a flat global production outlook, your Seatings volume mix is going to be down almost 2 points. E-Systems down almost 4 points. Can you just help unpack a little more of the key drivers here for both segments that informs the underperformance first market?

只關註今年的銷售組合假設（相對於全球產量前景持平），您的座位銷售組合將下降近 2 個百分點。 E-Systems 下跌近 4 個點。您能否幫助解開這兩個細分市場的更多關鍵驅動因素，從而為表現不佳的第一市場提供資訊？

Yes, James, I can give you maybe just some highlights of some of the key platforms that are driving that. And some of it is temporary. For example, in seating, the Audi Q5 is lower year-over-year. It's going through a changeover this year, we would expect that volume to eventually come back. With Stellantis, the Compass volumes are lower. Their launch of that Wagoneer S in the same facility. And so that's offsetting some of that volume that sits in our backlog. We've got Mercedes SUV in our Tuscaloosa plant, both [ISVs] seem to be lower. And in Europe, Audi A6 and then some of the local programs that we're on are lower. In China, there's a changeover of the Mercedes E-Class. That's an important program for us.

是的，詹姆斯，我也許可以向您介紹推動這一趨勢的一些關鍵平台的一些亮點。其中一些是暫時的。例如，在座椅方面，奧迪Q5年減。今年它正在經歷轉變，我們預計這一數量最終會恢復。有了 Stellantis，Compass 的音量就更低了。他們在同一工廠推出了 Wagoneer S。因此，這抵消了我們積壓的部分數量。我們的塔斯卡盧薩工廠有梅賽德斯 SUV，兩種 [ISV] 似乎都較低。在歐洲，Audi A6 以及我們參與的一些本地項目的價格較低。在中國，賓士E-Class轎車正在換裝。這對我們來說是一個重要的計劃。

So volumes are lower this year. It seems to be lower. And some of this is, again, just kind of aligning with S&P making adjustments where necessary for customer insights. But those are the big drivers on the seating side. And E-Systems, it's -- you've got kind of a mixed bag. So with Ford, you have some that are up like the Maverick, the Bronco Sport and Escape that helps the Mach-E, however, is down pretty significantly. I think we have had it down 33%. That's a pretty good significant program in E-Systems. So that's weighing on the number. Focus is lower in Europe. Audi volumes are lower in Europe. In China, SAIC signings in China. Some of the Volvo Geely volumes are a little bit lower on certain platforms, [Subaru R2] is down, (inaudible) goes down. Those are the big kind of big drivers as we look at our volume assumptions in each of the segments.

因此今年的銷售量較低。好像還低一些。其中一部分只是為了與標準普爾保持一致，在必要時進行調整以獲取客戶洞察。但這些是座椅方面的主要驅動因素。而 E-Systems，它是一個混合體。因此，對於福特來說，有一些像 Maverick、Bronco Sport 和 Escape 這樣的車型有所上升，但幫助 Mach-E 的表現卻大幅下降。我認為我們已經下降了 33%。這是電子系統中一個非常好的重要項目。所以這對這個數字很重要。歐洲的關注度較低。奧迪在歐洲的銷售量較低。在中國，上汽在中國簽約。某些沃爾沃吉利的銷量在某些平台上有點低，[Subaru R2] 下降了，（聽不清楚）下降了。當我們審視每個細分市場的銷售假設時，這些都是重要的驅動因素。

Right. That's super helpful. And then just a follow-on, on that point. Thinking about 2025, obviously, you're not going to give my '25 guidance. But just for the Seating business, you're calling for a $500 million contribution in new business backlog for 2025, right? That would be just under 3 points growth over market off of the 2024 guide. It sounds as you just went through the Seating key platforms that are influencing 2024. My question is, can we think of 4 points growth over market for Seating as an achievable rate for next year? Or not necessarily? Just any thoughts on that.

正確的。這非常有幫助。然後就是關於這一點的後續。考慮到 2025 年，顯然，你不會給我的 '25 指導。但僅就座椅業務而言，您就呼籲為 2025 年的新業務儲備貢獻 5 億美元，對嗎？與 2024 年指導相比，這將比市場成長略低於 3 個百分點。聽起來您剛剛瀏覽了影響 2024 年的座椅關鍵平台。我的問題是，我們能否將座椅市場成長 4 個百分點視為明年可實現的成長率？還是不一定？只是對此有任何想法。

Yes. Growth over market is difficult. It's choppy. It's volatile. And we saw a perfect example of that, even just kind of within '23 started out decent and got worse as the year progressed as there were some mix shift with certain customers. So I think it's important to kind of take a step back and look at the business over a longer time horizon. And over the last 4 years, we did deliver, as we highlighted in the prepared remarks, 4 points of growth over market in Seating, 6 points in E-Systems. As I look out over the next 5 years, I do see this may be uncertainty around the transition to EVs weighing on growth over market a little bit.

是的。超越市場的成長是困難的。很不穩定。它是不穩定的。我們看到了一個完美的例子，即使只是在 23 年之內，一開始還不錯，但隨著時間的推移，情況變得更糟，因為某些客戶發生了一些混合轉變。因此，我認為退後一步，從更長遠的角度審視業務是很重要的。在過去 4 年裡，正如我們在準備好的評論中所強調的那樣，我們在座椅市場上確實實現了 4 個百分點的成長，在電子系統市場上實現了 6 個百分點的成長。當我展望未來 5 年時，我確實認為向電動車過渡的不確定性可能會稍微影響市場的成長。

I do see in E-Systems as we wind down some of our noncore products that will temper growth in the kind of near to medium term. But if I look out 5 years, I think 4 points of growth over the market in Seating, 6 points of growth over the market in E-Systems in the long run is very achievable. And in Seating, the catalyst for it now, in the past, it was conquest wins primarily, and we do have some benefit from that in the future, but a lot of it is from modularity in -- what we're doing with thermal comfort, what we're doing with new innovative products that we highlighted like FlexAir and ReNewKnits.

我確實在電子系統中看到，隨著我們逐漸減少一些非核心產品，這將在近中期抑製成長。但如果我展望5年，我認為從長遠來看，座椅市場成長4個百分點，電子系統市場成長6個百分點是非常可以實現的。在座椅方面，現在的催化劑，在過去，主要是征服勝利，我們將來確實可以從中受益，但其中很大一部分來自模組化——我們正在用熱技術做的事情舒適度，我們正在利用FlexAir 和ReNewKnits 等新的創新產品所做的事情。

So just take FlexAir, for example. Foam is a $4.5 billion market. We have a relatively small share of that today, less than 10% of that market. We see FlexAir potentially displacing polyurethane film at least in second and third row applications and maybe in all seatback applications over a period of time. We're going to dominate that market. That could be a $500 million business for us 5 years out. It would be $1 billion business for us long term. We continue to look for those kind of $1 billion component businesses.

以 FlexAir 為例。泡沫市場是一個價值 45 億美元的市場。目前我們所佔的份額相對較小，不到該市場的 10%。我們認為 FlexAir 可能至少在第二排和第三排應用中取代聚氨酯薄膜，並且可能在一段時間內在所有座椅靠背應用中取代聚氨酯薄膜。我們將主導這個市場。 5 年後，這對我們來說可能是一項價值 5 億美元的業務。從長遠來看，這對我們來說將是 10 億美元的業務。我們將繼續尋找那些價值 10 億美元的零件業務。

When we started back in 2015 with leather. That's a great business for us. Now we have thermal comfort, a $600 million business that we acquired, it will be a $1 billion business in 2027. We're on our way there. FlexAir may be something that meets those levels of growth as well based on initial customer interest in all the environmental benefits associated with it in performance benefits associated with it.

當我們從 2015 年開始生產皮革時。這對我們來說是一項偉大的事業。現在我們擁有熱舒適業務，這是我們收購的一項價值 6 億美元的業務，到 2027 年它將成為一項價值 10 億美元的業務。我們正在朝著這個目標前進。 FlexAir 可能會滿足這些成長水平，並且基於最初客戶對與其相關的所有環境效益和效能效益的興趣。

So I think that structurally, the underlying drivers of growth in Seating are stronger today than they've ever been. Our path to getting more jet market share is very clear, and we're confident in the long-term growth prospects of that business.

因此，我認為從結構上看，如今座椅成長的潛在驅動力比以往任何時候都更加強大。我們獲得更多噴射機市場份額的道路非常明確，我們對該業務的長期成長前景充滿信心。

Our next question comes from Emmanuel Rosner from Deutsche Bank.

我們的下一個問題來自德意志銀行的伊曼紐爾·羅斯納。

My first question is about the EV backlog. Just so we get a little bit of a better understanding of, I guess, to what extent this was derisked for like EV volume assumption. Are you able to quantify for us how much of the backlog is currently tied to EV platforms in E-Systems and as well as in Seating. Overall, like now that you essentially reduce these volume assumptions, what percentage of your backlog is EV at this point?

我的第一個問題是關於電動車的積壓。我想，這樣我們就可以更好地理解電動車銷售假設在多大程度上消除了這種風險。您能否為我們量化目前有多少積壓訂單與電子系統和座椅中的電動車平台相關。總體而言，就像現在您基本上減少了這些數量假設一樣，此時 EV 佔積壓訂單的百分比是多少？

Yes. Even after those adjustments, electric vehicles are still the most prominent new vehicles launching over the next 3 years. And so in Seating, it's about 57% of the backlog of the new programs rolling on and E-Systems is 75%. And that's not just electrification revenue as we define it, which would be high-voltage wiring or electronics products that are unique to electric vehicles that would include low-voltage wiring on electric vehicles.

是的。即使經過這些調整，電動車仍然是未來三年推出的最引人注目的新車。因此，在座位方面，大約有 57% 的新計劃正在積壓，而電子系統則佔 75%。這不僅僅是我們定義的電氣化收入，它是電動車特有的高壓佈線或電子產品，其中包括電動車上的低壓佈線。

So it's still -- despite the fact that we have significantly reduced the volume assumptions and the timing of the launches, it's still a prominent and significant part of the backlog. And so our belief is still that the transition to electric vehicles is happening. It may happen more slowly than what was previously anticipated, but there's still a significant shift that's taking place. It may ultimately end up being a lower percentage of the market than many had expected, but it's still a significant part of the market, and it still dominates our customers' new program launches in the near term.

因此，儘管我們已經大幅減少了數量假設和發佈時間，但它仍然是積壓的一個突出且重要的部分。因此，我們仍然相信向電動車的過渡正在發生。它發生的速度可能比之前預期的要慢，但仍然正在發生重大轉變。它最終的市場份額可能低於許多人的預期，但它仍然是市場的重要組成部分，並且它仍然主導著我們客戶在短期內推出的新計劃。

Now if you say you don't believe that, that level of penetration is going to happen with EVs. I think the flip side to that is a few of the questions earlier highlighted, is that some of these ICE programs that we've assumed are going to balance out are not going to balance out or they're going to run at a higher volume than what we've assumed for a longer period of time.

現在，如果你說你不相信這一點，那麼電動車將會達到這種程度的滲透率。我認為另一面是之前強調的一些問題，即我們假設會平衡的一些 ICE 計劃不會平衡，或者它們將以更高的數量運行比我們在較長一段時間內所假設的情況要多。

So we're definitely in a transition period. It's difficult to project what's going to happen. We've tried to be balancing our assumptions at this stage and clear in our guidance. But it's difficult predict, Emmanuel.

所以我們肯定正處於一個過渡期。很難預測將會發生什麼。我們在現階段試圖平衡我們的假設，並在我們的指導中明確這一點。但這很難預測，伊曼紐爾。

Yes, that's helpful. And then one quick follow-up or point of clarification around some of the cost headwinds, especially labor cost inflation. I guess on a full year basis, do you assume that you recover these from customers? Or is that -- would there be a lag? Or is there like a portion that you expect that you will be responsible for? I guess I understand that it takes time and there's a process and negotiation, et cetera. But I guess, net-net, does that remain sort of like a headwind?

是的，這很有幫助。然後是對一些成本不利因素（尤其是勞動成本通膨）的快速跟進或澄清。我想在全年的基礎上，您是否認為您從客戶那裡收回了這些？或者說——會有延遲嗎？還是您希望自己負責一部分？我想我明白這需要時間，並且有一個過程和談判等等。但我想，網絡，這仍然有點像逆風嗎？

Yes. I think that's -- going back to what we talked about earlier, historically, wage inflation was 3%, 4%. And our efficiency programs in the plant would offset that as well as, in some cases, a little bit more than that, and that would contribute to offset our customer price reductions each year. That was kind of the old model. That 3%, 4% is now twice that. And I don't think that necessarily continues, as I look out '25, '26, '27, but in '24, it is. And so what we're -- what we believe we should recover either this year or next year, is that kind of excess labor inflation beyond that historical normal level that we have seen and the economy has experienced for decades. And so that's sort of the philosophy.

是的。我認為，回到我們之前談到的，歷史上薪資通膨率為 3%、4%。我們工廠的效率計劃將抵消這一影響，在某些情況下，甚至會多一點，這將有助於抵消我們每年對客戶的降價。那是一種舊模型。那個3%、4%現在是這個數字的兩倍。我認為這種情況不一定會持續下去，正如我在 25 年、26 年、27 年所看到的那樣，但在 24 年，情況確實如此。因此，我們認為今年或明年應該復甦的是，勞動力通膨過剩，超出了我們所看到的歷史正常水平，而且經濟已經經歷了幾十年。這就是哲學。

And so I don't want to make it as simple as this, but roughly half of it, we've got to offset through our cost reduction programs, automation, restructuring, shifting the footprint, better utilization of our facilities and then the other half has got to come through some form of recovery either this year or next year in order to preserve the margin trajectory, the margin growth that we expect to achieve this year and next year.

因此，我不想讓它變得這麼簡單，但大約有一半的成本，我們必須透過成本削減計劃、自動化、重組、轉移佔地面積、更好地利用我們的設施以及其他方式來抵消一半的企業必須在今年或明年經歷某種形式的復甦，以維持利潤率軌跡，也就是我們預計今年和明年實現的利潤率成長。

I guess in this year's guidance, do you assume a net headwind from labor cost inflation under recovered? Or do you assume that -- the piece that you need to recover from your customers is being recovered?

我想在今年的指導中，您是否假設勞動成本通膨帶來的淨阻力尚未恢復？或者您是否認為 - 您需要從客戶那裡恢復的部分正在恢復？

Yes. I think, yes, it would be a net headwind for this year in the guidance. We've talked in the past about generating 50 to 100 basis points of net performance. We've guided to less than that. And I think you could certainly attribute the shortfall to a combination of the transactional FX impact as well as unrecovered wage inflation. It's not quite that precise, but I think that's a fair perspective.

是的。我認為，是的，這將是今年指導的淨阻力。我們過去曾討論過產生 50 到 100 個基點的淨績效。我們的指導方針是低於這個數字。我認為你當然可以將這一缺口歸因於交易性外匯影響以及未恢復的薪資通膨。雖然不太準確，但我認為這是一個公平的觀點。

And I think the way I categorize it and discuss it too, is that even though we have past practice in some of these negotiations and historical understanding or baseline of how we get recovery. We base our guidance on that. Now we're in for a much different number as far as getting settled within the year and that -- there's timing elements to that.

我認為我對其進行分類和討論的方式是，即使我們在其中一些談判中擁有過去的實踐以及我們如何恢復的歷史理解或基線。我們的指導是基於此。現在，就年內解決問題而言，我們面臨著一個截然不同的數字——這其中有時間因素。

Obviously, we're pulling on productivity or pulling on volume, all these other things. And so we're going in above what the net difference would be for negotiations based on past practice. Some of them are in models or some of them are discussed in other settlements. And I think in addition to that, we have a lot more control around the automation within our facilities. Like Jason mentioned earlier, 35% of our labor is in our trim. And we are just on one of our facilities. And in our own control, we've been able to automate, which has always been something that because of variability within the trim covers, we've done a nice job of bringing in very sophisticated innovation to automate that equipment. That's in ours.

顯然，我們正在提高生產力或銷量，以及所有其他方面。因此，我們將根據過去的實踐來討論談判的淨差異是什麼。其中一些在模型中，或者其中一些在其他解決方案中進行了討論。我認為除此之外，我們對設施內的自動化有更多的控制。正如 Jason 之前提到的，我們 35% 的勞動力都處於修剪狀態。我們只是在我們的一處設施內。在我們自己的控制下，我們已經能夠實現自動化，這一直是由於裝飾罩內的可變性，我們在引入非常複雜的創新來實現設備自動化方面做得很好。那是我們的。

Now accelerating that faster is another nice opportunity for us. And so we've been somewhat conservative on how we roll that out but those are opportunities that I think would improve the overall number as we look at it today.

現在更快地加速對我們來說是另一個很好的機會。因此，我們在如何推出這一點上一直有些保守，但我認為這些機會將提高我們今天看到的總數。

And as we've talked about earlier, that's one of the factors that could drive us into a different spot in the range. So at the high end of our guidance range, if we do better than anticipated, certainly, that would be an attributing factor to getting Seating to 7% and E-Systems to 6% this year.

正如我們之前談到的，這是可能促使我們進入該範圍的不同位置的因素之一。因此，在我們指導範圍的高端，如果我們做得比預期更好，當然，這將成為今年將座位率提高到 7%、將電子系統提高到 6% 的一個因素。

And ladies and gentlemen, with that, we'll be concluding today's question-and-answer session. I'd like to turn the floor back over to management for any closing remarks.

女士們、先生們，我們今天的問答環節就到此結束。我想將發言權交還給管理階層，讓他們發表結束語。

Yes. Thanks, Matt. I'm sure everyone on the call now is just the Lear team. I just want to again thank everyone for their outstanding job in 2023. And like we always discussed so what now what? Well, we got some challenges ahead of us this year, but we know what we need to do, and I appreciate all the great work we're going to do this year to hit our targets and achieve them. So thank you for -- everybody for all your hard work.

是的。謝謝，馬特。我確信現在參加電話會議的每個人都是李爾團隊。我只想再次感謝大家在 2023 年所做的出色工作。就像我們一直討論的那樣，現在該怎麼辦？嗯，今年我們面臨一些挑戰，但我們知道我們需要做什麼，我感謝我們今年為實現目標所做的所有出色工作。謝謝大家的辛勤工作。

Ladies and gentlemen, that does end today's conference call. We do thank you for joining. You may now disconnect your lines.

女士們先生們，今天的電話會議到此結束。我們非常感謝您的加入。現在您可以斷開線路。